Emerging Markets: Calm Amid Geopolitical Storms

Amidst escalating geopolitical tensions and awaiting a major inflation report from the U.S., emerging market currencies and stocks remained relatively unchanged. The cautious environment, compounded by market holidays in Asia and Latin America, saw subdued movements in EM assets with some marginal gains in stocks.

Emerging market currencies and stocks were poised to conclude the week with minimal changes on Friday. The market remained cautious due to rising geopolitical tensions as investors awaited a critical inflation report from the U.S., which could influence the Federal Reserve's interest rate decisions.

The MSCI index tracking global EM currencies remained steady, while its stock counterpart showed slight upticks. The week's trading was largely muted due to holidays in key Asian markets and geopolitical uncertainties negatively impacting risk appetites.

The oil market is bracing for turbulence amid U.S.-Iran tensions, and rising prices are bolstering the USD. Additionally, peace talks between Russia and Ukraine ended without progress, affecting market sentiment. In the meantime, Indonesia is preparing a major share release under global scrutiny, and Ukraine eyes foreign military sales amid IMF negotiations.

(With inputs from agencies.)