Emerging-market equities plunged about 10% this month while average yields on local-currency bonds surged to two-year highs. Energy-importing nations such as Poland, South Africa and Thailand saw bond yields jump 50–100 basis points, and some currencies slid over 5%.

Portfolio managers at TT International and AllianceBernstein began purchasing emerging-market credit and local bonds, including Polish and Czech local-currency debt and dollar-denominated Venezuelan and Lebanese securities. They argue the market has mispriced risk and that central banks may cut rates to counter a growth shock.

JPMorgan Chase strategists report that money markets have cut the probability of a Federal Reserve rate increase this year to under 50%, forecasting a dovish shift if oil-price pressures intensify. This view supports expectations of rate cuts to bolster economic demand.

The selloff ended a 20-week inflow streak into U.S.-listed emerging-market ETFs that totaled $58.9 billion, suggesting room for further outflows. Consensus among investors remains that EM central banks could raise rates against an oil-driven inflation spike, while dollar strength may also hurt returns.