Emerging-market equities and currencies are set for their worst weekly decline since the pandemic's peak in 2020. The MSCI Emerging Markets (EM) currency gauge has fallen approximately 1.4% this week, while the comparable equity gauge is down over 6%. Both indices are tracking towards their lowest closing levels since March 2020. Brent crude futures surged this week to their highest level since July 2024, significantly pressuring EM currencies.

Citigroup analyst Luis Costa noted investors have trimmed risk but may re-enter long EM positions if stabilization occurs. Oil at $100 per barrel could force monetary tightening, warned Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., as inflation risks breaching central bank targets. The South Korean won suffered its largest single-day closing loss since 2009, amid warnings of forced deleveraging. EM currency volatility has spiked, surpassing G7 peers on the JPMorgan EM FX volatility index. US nonfarm payrolls data next week will be crucial for assessing the Federal Reserve's rate trajectory.