Emerging Markets Sway Under Geopolitical Tensions

Amid escalating Middle East tensions, emerging market assets fell as investors leaned towards safe-haven assets. Geopolitical events in Lebanon and robust U.S. job data drove the dollar to a multi-week high. Market movements also highlighted Chinese stimulus impacts, South African growth, and inflation trends in Turkey and Europe.

On Thursday, emerging market assets witnessed a decline as escalating Middle East tensions prompted investors to seek safe-haven assets. Geopolitical events, particularly in Lebanon where Israel's bombing led to casualties, pushed the U.S. dollar to multi-week highs amid robust employment data.

Investors are now focused on U.S. economic indicators, including the non-farm payrolls report, to gauge future Federal Reserve actions concerning rate cuts. Asian markets saw volatility, with Hong Kong shares dropping post-rally and Chinese markets closed. South Africa's private sector showed growth, while Turkey's inflation remains a concern for policymakers.

In Eastern Europe, stable performances of certain currencies were noted amid ongoing regional tensions and financial announcements. Additionally, Ethiopia's bondholder group rejected proposed restructuring terms, further adding to the day's financial complexity.

(With inputs from agencies.)