{"id":57170,"date":"2025-12-14T10:08:34","date_gmt":"2025-12-14T14:08:34","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/emerging-market-carry-trades-poised-for-continued-growth-in-2026-amid-uae-cyprus-strategic-partnership-and-global-condemnation-of-sydney-attack\/57170\/"},"modified":"2025-12-14T10:08:34","modified_gmt":"2025-12-14T14:08:34","slug":"emerging-market-carry-trades-poised-for-continued-growth-in-2026-amid-uae-cyprus-strategic-partnership-and-global-condemnation-of-sydney-attack","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/emerging-market-carry-trades-poised-for-continued-growth-in-2026-amid-uae-cyprus-strategic-partnership-and-global-condemnation-of-sydney-attack\/57170\/","title":{"rendered":"Emerging Market Carry Trades Poised for Continued Growth in 2026 Amid UAE-Cyprus Strategic Partnership and Global Condemnation of Sydney Attack"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Emerging market carry trades<\/strong> are anticipated to extend their strong performance into <strong>2026<\/strong>, following a robust year in <strong>2025<\/strong>, with some analysts projecting returns near <strong>8%<\/strong> for local-currency emerging-market debt by mid-2026.<\/li>\n<li>The <strong>United Arab Emirates<\/strong> and <strong>Cyprus<\/strong> are significantly enhancing bilateral relations, focusing on <strong>investments, energy, and economic cooperation<\/strong>, with Cyprus set to assume the <strong>EU Presidency<\/strong> in January 2026.<\/li>\n<li>A terrorist shooting incident at a <strong>Jewish gathering in Sydney, Australia<\/strong>, has drawn strong condemnation from the <strong>UAE<\/strong> and <strong>Jordan<\/strong>, highlighting global security concerns.<\/li>\n<\/ul>\n<h2>Emerging Market Carry Trades Eye Strong 2026<\/h2>\n<p>Investors are signaling continued optimism for <em>carry trades<\/em> across <strong>emerging markets (EM)<\/strong>, expecting the popular strategy to deliver further gains in <strong>2026<\/strong> after a &quot;blockbuster year&quot; in <strong>2025<\/strong>. Major Wall Street institutions are preparing for another robust year in emerging markets, driven by expectations of a softer <strong>US dollar<\/strong> and the global surge in <strong>artificial intelligence (AI)<\/strong> investment.<\/p>\n<p>In <strong>2025<\/strong>, local-currency emerging-market bonds generated approximately <strong>7%<\/strong> in returns, marking their best performance since <strong>2020<\/strong>, while a broad emerging-market currency index climbed over <strong>6%<\/strong>. Strategists at <strong>Morgan Stanley (<a href=\"\/stock\/MS\">MS<\/a>)<\/strong> anticipate returns for local-currency emerging-market debt to reach around <strong>8%<\/strong> by mid-2026. A key gauge tracking carry-trade returns across eight emerging markets, funded by short positions in the dollar, saw a jump of more than <strong>12%<\/strong> in 2025. This bullish outlook is largely underpinned by the expectation of further <strong>Federal Reserve<\/strong> rate cuts. However, some global money managers are cautioning about potential risks from <em>overcrowding<\/em> in certain EM trades, such as the <strong>Brazilian real<\/strong> and <strong>AI-linked stocks<\/strong>, which could lead to increased volatility in foreign exchange markets.<\/p>\n<h2>UAE and Cyprus Forge Deeper Strategic Ties<\/h2>\n<p>The <strong>President of the United Arab Emirates<\/strong>, Sheikh Mohammed bin Zayed al Nahyan, is undertaking a historic official visit to <strong>Cyprus<\/strong> at the invitation of President Nikos Christodoulides. This visit signifies a new momentum in bilateral relations, with discussions centered on enhancing <strong>investments, energy, and broader economic cooperation<\/strong>. The talks also encompass prospects for strengthening relations between the <strong>European Union<\/strong> and <strong>Gulf countries<\/strong>, especially as Cyprus is poised to assume the <strong>Presidency of the Council of the European Union<\/strong> on January 1, 2026.<\/p>\n<p>In conjunction with the presidential visit, <strong>UAE Ministers<\/strong> and other officials participated in an investment forum alongside <strong>Invest Cyprus<\/strong> and the <strong>Cyprus Chamber of Commerce and Industry<\/strong>. The forum aimed to bolster investment and business cooperation, with a focus on establishing stable structures and promoting mature projects. Both leaders are expected to adopt a <strong>Joint Declaration<\/strong> to further upgrade their strategic relationship, underscoring Cyprus&#39;s role as a reliable partner and stable hub in the Eastern Mediterranean.<\/p>\n<h2>International Condemnation Follows Sydney Attack<\/h2>\n<p>A terrorist shooting incident at a <strong>Jewish gathering in Sydney, Australia<\/strong>, has drawn swift international condemnation. The <strong>United Arab Emirates<\/strong> strongly condemned the attack, which resulted in multiple deaths and injuries, reaffirming its rejection of all forms of violence and terrorism. Similarly, the <strong>Jordanian Ministry of Foreign Affairs and Expatriates<\/strong> expressed its condemnation and full solidarity with Australia, emphasizing its stance against acts aimed at undermining security and stability.<\/p>\n<p>The attack occurred at <strong>Bondi Beach<\/strong> during a <strong>Hanukkah celebration<\/strong>, with Australian authorities describing it as a terrorist act. Reports indicate the death toll rose to <strong>ten<\/strong>, including one attacker, with <strong>twelve civilians<\/strong> and <strong>two police officers<\/strong> sustaining injuries. Following the incident, <strong>Hanukkah celebrations in Melbourne<\/strong> were reportedly cancelled as a precautionary measure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Emerging market carry trades are anticipated to extend their strong performance into 2026, following a robust year in 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