Trump signals easing of tariffs, emerging market stocks hit four-year high.

Driven by signs of easing tension in the US-China trade dispute, emerging market stocks climbed to their highest level in over four years. On Monday, an emerging market stock index rose 1.5%, reaching its strongest level since June 2021. Stocks such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), TENCENT (00700), and Alibaba Group Holding Limited Sponsored ADR (09988) were among the top gainers. An emerging market currency index also rose by 0.2%. The improved market sentiment is attributed to US President Trump's remarks during an interview on Sunday, where he stated that the tariffs imposed on Chinese goods are "unsustainable," although they will be maintained for the time being. He added that he maintains a good relationship with Chinese leaders and expects to meet with them in South Korea. Later this month, the Asia-Pacific Economic Cooperation (APEC) meeting will be held in South Korea. Trump also pointed out that rare earths, fentanyl, and soybeans are core issues in negotiations between the US and China. Chris Weston, Research Director at Pepperstone Group, wrote in a report, "Although the future development of the trade situation remains uncertain, the current market pricing suggests a positive outcome or at least that a worse scenario is unlikely." Weston mentioned that the market's underlying expectation seems to be that China will relax its export controls on rare earths, which could extend the current tariff truce. However, some may question whether the market is underestimating the risk of China not making concessions. Most Asian emerging market currencies strengthened against the US dollar, with the South Korean won and Indian rupee leading the gains. Analysts at Barclays PLC Sponsored ADR, including Lefteris Farmakis, stated in a report, "Given the strategic importance of the current dispute topics, we have ample reason to believe that the US-China dispute is currently within manageable limits."