EMERGING MARKETS-Emerging FX steadies, stocks crimped by China data

  • Reuters
  • Stock Market News
EMERGING MARKETS-Emerging FX steadies, stocks crimped by China data
Credit: © Reuters.

By Claire Milhench

LONDON, Nov 8 (Reuters) - Most emerging market currencies steadied on Wednesday after a sharp sell off towards the end of Tuesday's London trading caused by a dollar bounce, but stocks failed to make headway following mixed Chinese trade data.

Tuesday's falls saw the Russian rouble RUB= lose 1.99 percent against the dollar to touch 2-1/2 month lows, while the Turkish lira TRY= came within a whisker of the record lows hit in January after selling off 1.5 percent. with the dollar slipping .DXY against a basket of currencies on Wednesday amid concerns that Republican plans for major U.S. tax cuts could be delayed, some emerging currencies found a foothold. rouble firmed 0.1 percent, the Mexican peso MXN= strengthened 0.2 percent and the South African rand ZAR= , which tumbled almost 1 percent on Tuesday, traded flat.

However, the lira extended losses falling a further 0.3 percent.

"There are idiosyncratic stories - Turkey is definitely the story where investors should be most careful, but to some extent the recent depreciation shows the weakness has already mostly materialised," said Sebastian Barbe, a strategist at Credit Agricole (PA: CAGR ).

He added that much of the general weakness in EM forex was down to U.S. interest rate expectations, with two-year yields on Treasuries increasing and putting pressure on the more fragile emerging currencies such as the lira.

The U.S. yield curve has flattened sharply in recent weeks, with the gap between two- and 10-year yields shrinking to just 68 basis points, the smallest since 2007. The move largely reflects wagers the Fed will hike in December, pushing up short-term yields.

But Barbe argued that the December rate rise was now fully priced in, and the Fed would hike rates gradually next year.

Stocks remained on the backfoot following mixed Chinese trade data, which seemed to suggest the world's second-largest economy was starting to cool after a strong first half. Beijing reported that October imports rose 17.2 percent from a year earlier, beating forecasts of 16 percent, export growth was just under estimates at 6.9 percent.

China's mainland blue chip index .CSI300 rose to mid-2015 highs before falling back into the red, and MSCI's benchmark emerging stocks index was 0.2 percent lower .MSCIEF .

In emerging Europe Turkish stocks .XU100 fell 1.1 percent, but Asia ex-Japan eked out another decade peak, with South Korea .KS11 among the outperformers, up 0.3 percent.

U.S. President Donald Trump addressed lawmakers in Seoul on Wednesday, using some of his toughest language yet against North Korea, calling on other countries to isolate it. the Gulf, the ripples from Saudi Arabia's anti-corruption purge continued to be felt with Saudi stocks .TASI down almost 1 percent and shares in companies linked to people detained in the investigation sliding further. five-year credit default swaps rose 2 basis points (bps) from Tuesday's close to 100 bps, the highest level since mid-July, and Saudi riyal one-year forwards SAR1Y= versus the dollar weakened to their lowest since end-July.

Other regional bourses continued to feel the heat, with Dubai .DFMGI down 2.2 percent, its worst one-day fall since June 2016, Abu Dhabi .ADX down 1.1 percent and Qatar .QSI down almost 1 percent.

Lebanon's dollar bonds sold off further, with the 2020 issues LB105242115= LB094422663= falling another 2.4-2.6 cents according to Thomson Reuters data and five year CDS blowing out to 592 bps, the highest since late 2008. country's debt has been under pressure after Riyadh accused Beirut on Monday of declaring war against it. emerging Europe the Polish zloty EURPLN= was steady ahead of a central bank meeting at which the bank is expected to keep rates on hold at a record low of 1.5 percent. to a Reuters poll of analysts, its next likely move is a hike in fourth quarter 2018, but the bank's comments will be watched for any signs of concern over inflation.

The Romanian leu EURRON= was steady against the euro after suffering its biggest one day loss since January on Tuesday when central bank comments that the "leu could move either way", signalled a row back on the earlier stance of keeping the leu supported. GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB ) Emerging Markets Prices from Reuters

Equities

Latest

Net Chg % Chg % Chg

on year

Morgan Stanley (NYSE: MS )

Emrg Mkt Indx .MSCIEF 1132.56

-1.99 -0.18 +31.35

Czech Rep

.PX

1059.67

+3.94 +0.37 +14.98

Poland

.WIG20

2535.24

-1.13 -0.04 +30.15

Hungary

.BUX

39882.09 +73.09 +0.18 +24.62

Romania

.BETI

7768.94 +21.25 +0.27 +9.65

Greece

.ATG

745.75

-2.69 -0.36 +15.86

Russia

.IRTS

1154.88

+7.90 +0.69 +0.22

South Africa

.JTOPI 53708.47 -124.48 -0.23 +22.34

Turkey

.XU100 11099.12 -1172.74 -1.04 +42.18

China

.SSEC

3414.91

+1.33 +0.04 +10.03

India

.BSESN 33218.81 -151.95 -0.46 +24.76

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2017

Czech Rep

EURCZK=

25.57

25.55 -0.06

+5.64

Poland

EURPLN=

4.24

4.24 +0.05

+3.87

Hungary

EURHUF= 311.88

311.47 -0.13

-0.98

Romania

EURRON=

4.62

4.63 +0.13

-1.92

Serbia

EURRSD= 118.72

118.66 -0.05

+3.90

Russia

RUB=

59.32

59.33 +0.03

+3.28

Kazakhstan

KZT=

333.22

333.66 +0.13

+0.13

Ukraine

UAH=

26.62

26.72 +0.36

+1.43

South Africa ZAR=

14.24

14.22 -0.12

-3.57

Kenya

KES=

103.55

103.55 +0.00

-1.14

Israel

ILS=

3.51

3.51 +0.06

+9.65

Turkey

TRY=

3.89

3.88 -0.29

-9.44

China

CNY=

6.63

6.64 +0.11

+4.71

India

INR=

64.97

65.05 +0.12

+4.57

Brazil

BRL=

3.27

3.27 +0.00

-0.55

Mexico

MXN=

19.13

19.15 +0.13

+8.31

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 329

2

.15 7 95.83 1

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http://reut.rs/2hkXZkX

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