Emerging-market stocks and currencies faced a downturn on Monday as fresh US factory data caused traders to rethink their expectations for interest rate cuts. The MSCI gauge for EM stocks dropped 0.1%, while currencies also saw losses, with the Brazilian real and Hungarian forint leading the decline. The unexpected expansion of US factory activity in March led traders to price in less monetary policy easing by the Federal Reserve, impacting the odds of a rate cut in June. Mexico’s peso dropped as much as 0.7% following the data release, with analysts warning of potential further losses. Meanwhile, Turkey’s lira surged against the dollar as President Erdogan indicated continued support for the country’s economic program despite a recent electoral defeat. In Asia, China’s factory activity exceeded expectations, boosting optimism for the economy. Overall, the global market landscape remains uncertain as investors navigate shifting economic data and political developments.
