Wall Street maintains an optimistic outlook for emerging markets in 2026

Jinse Finance reported that major Wall Street banks are preparing to achieve further success in emerging markets, expecting that a weaker US dollar and the investment boom in the artificial intelligence sector will provide additional momentum for this asset class. These favorable factors are expected to drive further gains in emerging markets, with local currency bonds delivering a 7% return for investors—the best performance since 2020—and the currency index rising by more than 6%. Morgan Stanley strategists pointed out that as the US economy slows, the Federal Reserve may further cut interest rates, which will support the continuation of the market rally. The bank recommends that clients maintain long positions in emerging market local currency bonds, expecting returns to reach around 8% by mid-2026. For emerging market US dollar bonds, they forecast a "high single-digit" increase over the next 12 months.