EMERGING MARKETS-EM equity rally falters with geopolitics, data in focus

"It raises uncomfortable questions about who could be next — Colombia, Greenland, Canada — all regions Trump has previously targeted either for their natural ⁠resources, strategic positioning, ‌or both." The MSCI emerging market ⁠stock index fell 0.7%, while a corresponding currency gauge was flat.

Emerging markets ‌equities further pulled back on Thursday after a strong start to the year, with investors closely monitoring intensifying geopolitical developments and awaiting key U.S. data for clarity on monetary policy. U.S. President Donald Trump said U.S. ⁠oversight of Venezuela could last years, in an interview with The New York Times. Top U.S. officials said on Wednesday that Venezuela's oil sales and revenue needed to be controlled indefinitely to stabilise the Latin American region's economy, rebuild the oil sector and ensure it acts in U.S. ​interests. U.S. Secretary of State Marco Rubio said he would meet leaders of Denmark next week but signalled no shift from Trump's ‍aim to take over Greenland.

"The Venezuelan developments are highly unusual. The U.S. intervening directly, removing a country's leadership and seizing access to natural resources would mark a major escalation," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. "It raises uncomfortable questions about who could be next — Colombia, Greenland, Canada — all regions Trump has previously targeted either for their natural ⁠resources, strategic positioning, ‌or both."

The MSCI emerging market ⁠stock index fell 0.7%, while a corresponding currency gauge was flat. TENSIONS RISE IN ASIA

Romanian equities were a bright spot, gaining 2.2%. The producer price index rose 4.8% ‍year-on-year in November compared to an 8% gain in October, data showed. The Hungarian forint was 0.4% lower against the euro, and set for a fourth consecutive ​session of losses. The currency ended 2025 with gains of over 6%. The country sold 3 billion euros ($3.5 billion) of eurobonds, ⁠in line with its 2026 debt issuance plan, according to an Economy Ministry statement. Shares dipped 0.6%.

Poland's benchmark index fell 1.5% while Turkey's index slipped 0.3%. South African manufacturing sentiment fell ⁠to its lowest level for 2025 in December, a PMI survey showed, while factory activity slumped further. Equities dipped 0.4%, and the rand weakened against the greenback. Over in Asia, tensions rose after China launched an anti-dumping probe into chemical imports from Japan with Japanese ⁠chemical makers falling while Chinese rivals jumped. Most major indexes were lower with Thailand's and Hong Kong's dropping 2% and 1.2% respectively. In trade updates, ⁠Italy said it wanted a ‌stricter threshold for the suspension of imports under the planned Mercosur trade agreement ahead of an EU vote. French farmers blocked Paris streets in protest against the trade deal.

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