Key Takeaways
- Emerging markets are experiencing significant headwinds, with assets slipping due to escalating global trade tensions and the imposition of new tariffs by the U.S., impacting currencies and growth forecasts.
- The European Union has reiterated strong support for the Armenia-Azerbaijan peace process, expressing readiness to invest in regional connectivity and openings following a landmark meeting.
- A historic peace agreement between Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan was signed today at the White House, hosted by U.S. President Donald Trump, aiming to resolve a decades-long conflict.
- The peace deal includes the establishment of a new transit corridor, dubbed the "Trump Route for International Peace and Prosperity," with the U.S. securing exclusive development rights for the crucial link.
Emerging market assets are facing renewed pressure, slipping amidst intensifying global trade tensions and domestic political developments. The U.S.-China trade dispute has escalated, with tariffs now averaging 20%, and a threat of an additional 10% levy on BRICS nations, disrupting supply chains and impacting global economic confidence. This has led to a mixed performance in emerging market currencies, initially seeing the U.S. dollar strengthen, and a projected 0.2% downgrade in China's GDP growth for both 2025 and 2026. Investors are navigating this volatility through strategic reallocation towards resilient markets such as Southeast Asia, India, and Mexico, while some emerging market central banks are implementing rate cuts to stimulate growth despite a forecasted 2.4% slowdown in 2025.
In a significant geopolitical development, Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan met at the White House today, hosted by U.S. President Donald Trump, to sign a historic peace agreement. This landmark accord aims to end nearly four decades of conflict between the two South Caucasus nations and facilitate the reopening of key transportation routes. President Trump hailed the agreement as a success, noting that "Many Leaders have tried to end the War, with no success, until now, thanks to 'TRUMP'."
A pivotal element of the newly signed peace deal is the creation of a major transit corridor, which will be named the "Trump Route for International Peace and Prosperity." This route is designed to connect mainland Azerbaijan with its autonomous Nakhchivan exclave, a demand that previously stalled peace talks, and will also link to Turkey. The agreement grants the United States exclusive developmental rights to this transport corridor, signaling a significant U.S. role in regional infrastructure and economic opportunities.
The European Union has strongly welcomed today's meeting and the initialing of the Agreement on Peace and Establishment of Interstate Relations between Armenia and Azerbaijan. The EU has consistently supported the normalization process between the two countries, having welcomed the finalization of negotiations on the draft agreement earlier in March 2025. European Council President António Costa and European Commission President Ursula von der Leyen praised the development, with the EU expressing its readiness to provide additional support and expertise, and to invest in regional links and openings to foster lasting peace and security. The broader economic agreements signed with the U.S. are expected to "fully unlock the potential of the South Caucasus Region," according to the White House.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.