Stocks, FX flat ahead of c.bank-heavy week; Turkey’s lira sinks

Author of the article: Most emerging market stocks and currencies were flat on Monday, as caution kicked in ahead of a slew of central bank meetings and economic data due this week. Turkey’s lira severely underperformed its peers though, tumbling as much as 7% to a record low of 14.99 against the U.S. dollar on…
Stocks, FX flat ahead of c.bank-heavy week; Turkey’s lira sinks

Author of the article:

Most emerging market stocks and currencies were flat on Monday, as caution kicked in ahead of a slew of central bank meetings and economic data due this week.

Turkey’s lira severely underperformed its peers though, tumbling as much as 7% to a record low of 14.99 against the U.S. dollar on expectations that the central bank will likely cut interest rates again on Thursday, despite inflation crossing the 20% mark.

The lira is the worst performing emerging market (EM) currency this year, losing around half its value as perceived government interference in the central bank, coupled with a slew of economic ructions, left investors averse to the currency.

Turkish stocks hit a record high of 2,082.40 on Monday, with investors viewing equity markets as a relatively safer way to maintain exposure to the country.

Turkey clocked a larger-than-expected current account surplus in October, while factory output rose more than expected.

Among other EM currencies in Europe, the Middle East and Africa, Russia’s rouble fell 0.3%, while the South African rand rose 0.2%.

MSCI’s index of EM stocks eased 0.1%, while the currencies index was largely unchanged.

Most EM central banks have been lifting interest rates this year to offset a jump in inflation as more economies lifted COVID-related lockdowns.

Investors are waiting for central bank meetings this week in Hungary, Chile, Indonesia, Taiwan, Mexico, Turkey, Russia, Colombia and the Philippines.

“The majority of central bankers will try to provide some forward guidance for the market. However, I would not be surprised if these efforts were only partially successful, Ulrich Leuchtmann, head of FX and commodity research at Commerzbank, wrote in a note.

“Everything might have to be corrected if the development of the pandemic and inflation surprise – which is not that unlikely.”

Focus is also firmlt on the U.S. Federal Reserve’s final meeting this year, where the bank is expected to outline its plans for tapering stimulus and hiking interest rates next year.

Any early rate hikes by the Fed are likely to dent demand for risk-heavy assets, particularly in emerging markets.

The European Central Bank is also due to provide more details on its plans for phasing out pandemic-era stimulus.

In Central Europe, Hungary’s forint was flat to the euro, ahead of a central bank meeting on Tuesday. The bank was the first among its regional peers to hike this year, and is widely expected to raise rates further. 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

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

(Reporting by Ambar Warrick; Editing by Kirsten Donovan)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
France Wants Europe to Cut Its Energy, Raw-Materials Dependence
Read More

France Wants Europe to Cut Its Energy, Raw-Materials Dependence

Author of the article: Bloomberg News John Ainger (Bloomberg) — France wants the European Union to reduce its dependence on countries such as Russia and China for both energy and the raw materials needed to drive the green revolution. The 27-member bloc should ensure it’s not reliant on China when it comes to producing high-tech…
hit Beijing keeps up guard in fear of Shanghai-like misery
Read More

hit Beijing keeps up guard in fear of Shanghai-like misery

Author of the article: Reuters Eduardo Baptista and Thomas Suen BEIJING — The Chinese capital of Beijing closed some public spaces and stepped up checks at others on Thursday, as most of the city’s 22 million residents embarked on more COVID-19 mass testing aimed at averting a Shanghai-like lockdown. As Beijing rolled out three rounds…
Recession Unease Sends Pound Crashing to Worst Quarter Since ’08
Read More

Recession Unease Sends Pound Crashing to Worst Quarter Since ’08

As the UK economy teeters on the edge of recession, investors are bailing on the pound. Author of the article: Bloomberg News Alice Gledhill m)mfx5vpm{ssg0{i0}i9twei_media_dl_1.png Bloomberg RSS (Bloomberg) — In the words of AllianceBernstein economists this week: “The UK economy is being pulled apart.” Advertisement 2 This advertisement has not loaded yet, but your article continues…