In June, emerging market sovereign and corporate spreads tightened by 12 and 9 basis points, respectively, reflecting positive investor sentiment despite geopolitical tensions. The month began with an escalation in Middle East conflict, including Israeli strikes on Iranian infrastructure and a 12-day missile exchange. Oil prices surged but later retreated after a ceasefire. EM spreads remained resilient throughout. On the monetary policy front, most EM central banks held rates steady due to global uncertainty, while some continued easing amid falling inflation and a weaker USD. Trade optimism also strengthened as planned tariffs were scaled back and economic data showed minimal impact from existing ones. Softer US data pushed UST yields lower, enhancing total returns in EM credit. Despite high EM bond issuance strong demand for EM credit absorbed the elevated supply.