EM Markets Ride AI Waves Amid Ceasefire Uncertainty

The MSCI indexes for emerging market currencies and stocks marginally rose in a quiet trading week. Despite early year AI disruption fears, the markets, particularly in Asia and Latin America, have benefited from technological and commodity interests. However, fading ceasefire hopes affected the Ukrainian bond markets.

The MSCI indexes tracking emerging market currencies and stocks recorded slight increases in a subdued trading week. Wednesday saw a 0.1% rise in the global EM currencies index, and a 0.3% uptick in the stock gauge.

Despite fears of AI-led disruption at the year's start, emerging markets have seen robust growth, bolstered by strong demand for AI in Asia and a surge in commodity-driven markets in Latin America and South Africa. Conversely, hopes for a Ukrainian ceasefire dimmed, causing Ukrainian bonds to decline.

Negotiations between Ukraine and Russia in Geneva continue with little expectation for a breakthrough. Meanwhile, the South African rand rose 0.3% against the US dollar following positive consumer inflation data. Similarly, Hungary and Romania saw stock gains, although the Hungarian forint faltered after consecutive gains.

(With inputs from agencies.)