EMERGING MARKETS-Stocks, FX eye weekly gains, Russia cbank decision on tap
Reuters · 09/15 09:29
EMERGING MARKETS-Stocks, FX eye weekly gains, Russia cbank decision on tap

China industrial output, retail sales beat estimates

Rouble firms ahead of Russia's rate decision

Poland Aug CPI unchanged at 10.1%

EM stocks up 0.4%, FX subdued

By Johann M Cherian and Amruta Khandekar

- Emerging market stocks were set for weekly gains on Friday, boosted by strong economic data from China and hopes of the U.S. Federal Reserve standing pat on rates, while the Russian rouble firmed ahead of a widely expected interest rate hike.

MSCI's index for emerging markets equities .MSCIEF rose 0.4% by 0910 GMT to hit an over one-week high.

The index is eyeing gains of 1.2% for the week as upbeat retail sales and industrial output data for August added to signs of stabilisation in China's economy, though a worsening slump in the property sector kept investors on edge.

China's blue-chip stocks .CSI300 gave up early gains to fall 0.7% while China's yuan CNY= climbed to its strongest level in two weeks and was on track for weekly gains of 1%.

J.P.Morgan and ANZ on Friday raised their 2023 GDP forecast for China by 20 basis points to 5% and 5.1% respectively.

Emerging market currencies .MIEM00000CUS rose 0.6% for the week but were subdued on Friday, while the dollar =USD slipped from a six-month high hit in the previous session.

Robust economic data and easing core inflation in the United States has boosted hopes that the Fed could keep rates unchanged on Sept. 20.

Russia's rouble RUBUTSTN=MCX gained 0.6% to 96.37 per dollar with the country's bank likely to hike borrowing costs by 100 basis points to 13% later in the day, per a Reuters poll, to wipe away inflationary pressures.

"Due to sanctions imposed by the West, the rouble is unavailable to many international investors and so raising interest rates might have a strong impact on the currency," Piotr Matys, senior FX analyst at In Touch Capital Markets said.

"The Putin administration and the Bank of Russia may have to seriously consider other tools."

The rouble has gained 2.3% this week, while the South African rand ZAR=, down 0.1% on Friday, has risen 0.4% for the week.

Turkey's lira TRYTOM=D3 edged up to 26.95 against the dollar after the government's budget showed a surplus of 51.27 billion lira ($1.90 billion) in August.

The Polish zloty EURPLN= inched up 0.1% versus the euro after data confirmed domestic inflation in August was unchanged at 10.1%.

The Czech crown EURCZK= a bright spot among central and eastern European currencies, gained 0.3%.

For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Johann M Cherian in Bengaluru; Editing by Varun H K)