EM FX Headwinds to Persist, $SPCX at Risk

Odds are tilting towards continued pressure on EM currencies through Q3, especially those with higher external debt and reliance on commodity exports. The current $SPCX price action at 108.37, down significantly, suggests broader risk-off sentiment is deepening rather than easing. My read is we have a 65% probability of $SPCX retesting the 107.57 low from today, potentially by month-end, and a 40% chance of breaking it decisively. The reasoning stems from tightening global liquidity, persistent inflation concerns in developed markets leading to hawkish central bank rhetoric, and the knock-on effect on capital flows out of perceived riskier assets. EM central banks are caught between a rock and a hard place: either hike rates further to defend currencies at the expense of growth, or allow depreciation to fuel imported inflation. I'm leaning towards the former becoming less palatable for many, leading to further currency weakness against the USD, and equity market underperformance.