波兰和匈牙利股市与欧洲其它股市一同上涨，原因是德国宣布将斥资数千亿欧元用于国防和基础设施投资，这一举措标志着德国传统财政立场的重大逆转。中国股市也在科技股的推动下上涨，此前中国政府承诺支持科技行业，并设定了5%的经济增长目标。Emerging Markets MMF and stock markets rose, while Germany's spending plans also boosted Europe Assets.
According to Zhitong Finance APP, emerging market currencies and stock markets are rising as investors bet that higher tariffs will drag down the USA economy and shift investment flows, while Germany's spending plans also boost Europe assets.
The emerging market benchmark stock index rose by 1.8%, likely to achieve its largest increase since September last year, with currencies from Eastern European countries leading the Forex market. Following President Donald Trump's announcement of higher tariffs on Canada, Mexico, and China, the Bloomberg Dollar Spot Index fell for the third consecutive day.
The stock markets of Poland and Hungary rose alongside other European stock markets, due to Germany's announcement of spending hundreds of billions of euros on defense and infrastructure investment, marking a significant reversal of Germany's traditional fiscal stance. China's stock market also rose, driven by Technology stocks, after the Chinese government promised to support the technology sector and set a 5% economic growth target.
Senior Analyst Piotr Matys at inTouch Capital Markets stated, "We may be witnessing a significant shift in capital allocation towards European stocks, especially defense stocks, and this trend should gradually extend to emerging market stocks."
Matys mentioned that the Euro and other European currencies such as the Polish Zloty and Hungarian Forint also benefited from the trend of funds fleeing the USA.
Despite Trump's criticism of the South Korean government for imposing unfair tariffs on American products, the South Korean won still appreciated against the dollar.
So far this year, the stock market in Emerging Markets has risen by 3.5%, while the stock market in Developed Markets has increased by 1%, indicating that the performance of Emerging Markets has reversed the poor results of recent years.
Ulrich Leuchtmann, head of Forex research at Deutsche Bank, stated that the strong growth of the USA economy has allowed the Federal Reserve to implement a tightening monetary policy amid a strong dollar until now. He noted that this "American exceptionalism" is now facing challenges.
Leuchtmann mentioned that the USA may no longer be the only destination for capital seeking high returns.
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