Morgan Stanley Sees ‘Uncomfortable’ Rally in Emerging Markets

Emerging-market assets should keep rallying for the rest of the year, but gains will likely be limited by a slowing global economy and US policy uncertainty, according to Morgan Stanley.

The Wall Street bank is predicting that developing currencies will modestly appreciate against the dollar by year-end while lagging some other G-10 currencies. A gauge of emerging-market currencies is up more than 5% this year, the best performance through May since 2017.