Post trade deal, caution abound as emerging markets ready year-ending rally

Emerging-market stocks and currencies had their best week since June in the five days through Friday.

Emerging markets are gearing up to ride a risk rally in the final full week of December, with a troika of uncertainties all but lifted from traders’ radars. There’ll be plenty of caution around, though.

While last week’s meeting of the U.S. Federal Reserve and the U.K. election have been removed from the list of hurdles, there are sufficient doubts about the progress of the U.S.-China trade negotiations to keep buyers away. And if there’s anything to be gleaned from expected swings in the Chinese currency, the skeptics are legion. Options-implied one-year volatility for the offshore yuan stood at 4.9% Monday