Emerging Markets Surge Amid Tariff Talks and Turkish Turmoil

Emerging market stocks rose on Monday alongside U.S. stock futures as investors anticipated developments in tariff negotiations. Turkish assets recovered from their losses after facing a significant drop due to the imprisonment of Istanbul Mayor Ekrem Imamoglu. Central Eastern European currencies and stocks also gained, while Hungary's forint emerged as a top-performing EM currency.

Amid speculation over U.S. tariff talks, emerging market stocks climbed on Monday, reflecting investor optimism. The recent arrest of Istanbul's mayor, a political rival to President Erdogan, had rattled Turkish markets, but Monday saw a rebound as assets recouped losses.

The Turkish lira, which had plummeted to record lows, bounced back, bolstered by a 3.2% rise in local stocks. Meanwhile, the broader outlook for tariffs seemed less grim, with reports suggesting U.S. exclusion of certain sector-specific tariffs, potentially easing global supply chain worries.

Central Eastern Europe kicked off the week on a positive note, with currencies and stock markets performing well. Hungary's central bank is expected to maintain its base rate, solidifying the forint's position as the best-performing emerging market currency against the dollar this year. Conversely, Turkey's lira and the Indonesian rupiah have not fared well.

(With inputs from agencies.)