Emerging market stocks, including those in Central and Eastern Europe, are facing downward pressure due to a combination of factors impacting global markets. The MSCI EM Index has entered correction territory, down over 10% from its October peak, as the U.S. dollar strengthens. This dollar rally is driven by robust U.S. economic data and tempered expectations for Federal Reserve interest-rate cuts, which have squeezed global liquidity and dampened risk appetite across emerging markets. Additionally, China's underwhelming stimulus measures have failed to invigorate its slowing economy, further weighing on sentiment towards emerging markets.
European markets are also experiencing declines following the release of stronger-than-expected U.S. nonfarm payroll data. The report showed a significant increase in job growth, which has led to a rise in U.S. Treasury yields and a subsequent increase in euro zone bond yields. This has contributed to a sell-off in European equities, with the pan-European Stoxx 600 index down 0.23% as of 2:30 p.m. London time. The heightened borrowing costs in the euro zone and the U.K., alongside concerns about fiscal policies and economic data, are adding to the negative sentiment in European markets.
The Central and Eastern Europe Fund, Inc. (CEE) saw its price decrease to $11.16, marking a 0.80% drop from the previous close.