Emerging-Market Bonds Head for Worst Month Since Iran War as US Yields Top 5.20%

The story here is the transmission channel, not the selloff itself: US yields above 5.20% and oil near $110 are tightening conditions for emerging markets from the outside in, which leaves little room for domestic policy to cushion the blow. Countries with heavy external financing needs and energy import bills are the most exposed, and a Strait of Hormuz breakthrough is now the single variable that could reverse the oil leg of the pressure. Whether Treasury yields keep climbing, or oil retreats first, is the open question for the asset class.