* U.S. report shows Russian meddling in 2020 U.S. elections
* Biden says Putin "will pay the price," rouble slides up to 1.5%
* Fed, Brazil central bank decision eyed
* Brazilian real extends losses to fourth day (Updates after Biden comments on Russia, adds Latam prices)
By Susan Mathew
March 17 (Reuters) - Russia's rouble slumped more than 1% on Wednesday, putting it on track for its worst one-day sell-off in three weeks after, U.S. President Joe Biden's strong rhetoric against Russian President Vladimir Putin regarding 2020 U.S. Presidential elections.
"He will pay a price," Biden told ABC News in an interview that aired on Wednesday. A U.S. intelligence report on Tuesday bolstered longstanding allegations that Putin directed efforts to swing the election to Donald Trump, and sources said sanctions on Russian could come as soon as next week. rouble RUB= deepened looses to hit session lows as was last trading at 73.87 against the greenback. Russian dollar-denominated bonds fell across the curve with the longer-dated bonds such as the 2042 U076747385= and 2047 RU000A0JXU14= issues losing some 1.6 cents, according to Refinitiv data. comments from Biden were a lot more aggressive than what markets were anticipating," said Simon Harvey, FX analyst at Monex Europe, adding that the market now expects broad-based and more targeted economic sanctions towards domestic markets than previously imposed.
The latest threat comes after the United States and European Union imposed sanctions, albeit limited, over the alleged poisoning of Kremlin critic Alexei Navalny.
"Our structural view on (the) rouble is positive, we expect the CBR to hike and see stable economic fundamentals, but these periods of political risk pose a short term hurdle to our view, especially depending on how extensive and prolonged are they going to be and how much the relationship between the two countries suffer."
In broader emerging markets, the focus was on whether the U.S. Federal Reserve will signal policy tightening earlier than anticipated. MSCI's index of EM currencies .MIEM00000CUS was down 0.2%, while the stocks counterpart .MSCIEF slipped 0.6%, both down for a third day in four. dollar held steady ahead of the Fed decision due at 2 p.m. ET. Eyes will be on the reaction of U.S. Treasury yields which hit new 13-month highs running up to the decision. FRX/ US/
Brazil's real BRBY BRL= extended losses to a fourth straight session, down 0.7%. Brazil's central bank is expected to hike interest rates for the first time in six years as inflation surges. The government on Wednesday sharply raised its inflation outlook for this year to 4.4% from 3.2%. less than a 50 basis points rate hike ... would probably be seen as a disappointment by the market, putting pressure on (real)," said Commerzbank (DE: CBKG ) FX and EM analyst Melanie Fischinger.
The real is among the worst performing EM currencies year-to-date, down 8%, thanks to worries about fiscal spending, political interference and rising inflation. Key Latin American stock indexes and currencies at 1328 GMT:
Latest Daily %
change MSCI Emerging Markets
Latest Daily %
change Brazil real
Colombia peso COP=
For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.