Emerging Assets Pare Gains as Iran Rejects Ceasefire Proposal

Global Markets Waver Amid Uncertainty Over Iran Ceasefire Proposal

Emerging-market assets trimmed gains after a report that Iran has rebuffed a ceasefire proposal dented hopes for a quick resolution to the war in the Middle East. MSCI's index tracking currencies in the developing world was up 0.3%, off its highs from earlier in the session. Hungary's forint and Peru's sol were among the best performers.

A sister gauge of EM stocks climbed 0.6%, from as much as 0.8% earlier. Some markets remained closed on Monday for a holiday, including China, London, Hong Kong, and Australia.

The rejection of the deal, reported by Iran's state-run IRNA and delivered through mediator Pakistan, is the latest blow to efforts to end the month-long war that has triggered a global energy crisis and has traders worrying about the paths for growth, inflation, and interest rates across the world. US President Trump says Tuesday is the final deadline for Iran to make a deal.

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US Economic Data Shows Sharp Rise in Cost Pressures

US data showed that prices paid for services and materials jumped to their highest level since October 2022. Businesses are experiencing a sharp run-up in cost pressures for energy and other inputs due to the Iran war.

Pakistan Faces New Setback Over Debt Repayment

Pakistan's economy is facing a new setback after it failed to reach agreement with the United Arab Emirates to roll over $3 billion in debt for the first time in seven years. The loan amounts to about 18% of Pakistan's foreign exchange reserves, putting significant pressure on the country's external buffers and threatening the currency at a time when high crude prices are draining its coffers.

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