In July, Emerging Markets hard currency bonds were influenced by US rates again. With the market anticipating more FED cuts due to weakening data, the US 10-year Treasury yield neared 4%, and EM spreads widened as global growth expectations slowed. Toward the end of the month, tensions escalated in the Middle East following the assassination of Ismail Haniyeh, the political leader of the Iran-backed group Hamas, in Tehran. This spike in tension mirrored levels seen four months ago when Iran and Israel engaged in direct fire exchange for the first time. Weaker US and China data, combined with Middle East tensions, increased EM spread volatility. By month-end, EM corporate spreads widened by 10 bps, and sovereign spreads by 9 bps.