Emerging market bets split as global rate paths diverge

Emerging market monetary policies are diverging, with Indonesia delivering an off-cycle rate hike to stabilize its currency while Hungary and Poland consider cuts after softer inflation. State Street EM strategist Ning Sun is shorting the Indian rupee and Indonesian rupiah, labeling them 'bad carry' currencies, and favors 'good carry' exposure in Brazil, Colombia, Hungary, and South Africa. The divergence comes amid heightened global market volatility driven by uncertainty over the Middle East conflict and energy prices.