Trade war back on the radar for emerging markets as dollar lurks

A spate of country-specific events will also divert market participants from their obsession with the dollar this week

Emerging-market traders have been jolted back to reality this week after U.S. President Trump reminded markets that a trade deal with China isn’t finalized yet.

Trump over the weekend increased the pressure on China to wrap up a trade deal with a threat to levy new tariffs on the country’s goods. Investor anxiety, as measured by the offshore yuan’s one-week implied volatility, was headed for the biggest increase since the aftermath of China’s shock devaluation of its currency in August 2015.

“Markets are considering on the possible breakdown in U.S.-Sino trade talks,” said Jeffrey Halley, senior market analyst at Oanda Corp. in