EM looking dicey with rate hike jitters
Watching the dollar closely here. The recent uptick in US bond yields on persistent inflation worries and whispers of a more hawkish Fed stance is making me increasingly cautious on EM exposure. You see it across the board: capital flight risks are real when higher rates become a more concrete possibility in developed markets. It’s a classic play.
My watchlist is reflecting this; I'm trimming back on high-beta EM names, especially those with significant USD-denominated debt. $ZS soybean futures down 4.80% today to 175.745 is also a reminder of broader commodity volatility impacting some of these economies. We've seen this movie before, and it rarely ends well for currencies that aren't the dollar when the Fed gets serious. Not saying we're headed for a full-blown crisis, but the smart money pulls back before the fireworks.