Oil Shock Upends Emerging Bond Bets as Rate Hikes Loom

Investors are scrambling to reassess interest-rate bets as oil whipsaws, upending one of the best trades in emerging markets.

As currencies across the developing world sink amid the escalating conflict in the Middle East, money markets have flipped from pricing rate cuts to hikes in the span of a few days. Investors are having to reprice policy expectations in countries like India, South Africa and Hungary, given oil has surged, threatening an inflation surge across the developing world, alongside higher import bills.