Emerging Markets Rebound on Stimulus Hopes, Despite Hotter US Inflation
• Emerging market currencies pared early gains due to higher-than-expected US consumer price data that supports the Fed's plans to keep interest rates elevated.
• The South African rand was among the top performers, gaining over 1% against the dollar. Emerging market stocks also rose.
• Brazil's inflation hit the central bank's target, paving the way for a 4th straight rate cut at this week's policy meeting.
• In Asia, Hong Kong stocks rebounded over 1% as traders anticipate potential stimulus measures from a policymaker meeting.
• Investor sentiment toward emerging market bonds has turned the most bullish in 2 years due to dollar inflows and bets on a more dovish Fed.