INSUBCONTINENT EXCLUSIVE:
By Netty Ismail, Lilian Karunungan and Aline OyamadaMounting United States -China trade tensions and a shadow-banking imbroglio in India are
keeping investors on edge Monday, just as emerging markets showed signs of recovering from seven months of turmoil.
Fresh from a week in
which a gauge of developing-nation currencies had its best five-day stint since February as both stocks and bonds advanced, markets are now
having to cope with the imposition of levies on another $200 billion in Chinese goods and the fallout of missed payments by Mumbai-based
ILFS Group.
Later in the week, traders will focus on interest-rate decisions in Indonesia and the Philippines and the tightening race in
and New Zealand Banking Group Ltd
putting it close to breaking above its 50-day moving average
Apart from two days in April, the last time the index crossed that level -- in November -- it heralded a four-month rally that drove it to a
The index retreated on Monday, along with a measure for equities, which pared the rising streak in about seven months.
United States -China
TensionsChina dashed prospects for a near-term resolution to the trade war with the United States , warning President Donald Trump his
threats of further tariffs are blocking any potential negotiationsA 10 percent United States tariff on about $200 billion of Chinese goods
takes effect from Monday, with the duties rising to 25 percent on Jan
1The risk of tariffs being raised to 25 percent from January, as announced by Washington, could still be negotiated away through concessions
from Beijing over the next few months, according to NatWest MarketsIndia Contagion FearsInvestors are concerned that defaults by ILFS, which
has total debt of $12.6 billion -- 61 percent in the form of loans from banks and other financial institutions -- could spread to other
finance companies deepenedIndian authorities vowed to support financial markets by providing adequate liquidity to mutual funds and non-bank
financial companies, Finance Minister Arun Jaitley said on MondayIndonesia, Philippines Set to HikeInvestors will monitor rate decisions by
the Indonesian and Philippine central banks on Thursday to see if policy makers extend their hiking cycles
Both countries run current-account deficits, making their currencies among the most vulnerable in Asia to the emerging-market sell-offBank
Indonesia has been the most hawkish Asian central bank this year, raising its policy rate by a total of 125 basis points since May
It will probably lift it again this week
percent of its value against the dollar this yearThe Philippines has struggled with inflation that accelerated to 6.4 percent year-on-year
Bangko Sentral ng Pilipinas has delivered 100 basis points of rate increases since May and more tightening looks likely after Governor
Governor Jiri Rusnok joined an emerging consensus by saying he saw no reason to delay the move, meaning the focus after the meeting will be
on any forward-looking commentsFed Rate PathWith an interest-rate increase from the Federal Reserve already priced in, investors will be
seeking clues about the pace of hikes next year and beyondThe central bank will announce updated economic and financial projections,
borrow where interest rates are low to buy higher-yielding assets
A Bloomberg currency index that tracks carry-trade returns from eight emerging markets, funded by short positions in the dollar has risen
about 3 percent since reaching a 2 1/2-year low on Sept
All analysts surveyed by Bloomberg forecast that policy makers will hold the key rate at a record high of 14 percent to bolster the naira
and try to counter an acceleration in outflows in recent months amid the emerging-market selloffCentral bankers in Ghana and Kenya are also
likely to keep rates on holdTaiwan and Egypt decide on rates on Thursday, while Colombia is likely to hold its benchmark the following
dayBrazil Election RaceTwo weeks ahead of the presidential election, investors will be focused on two new polls from Ibope expected on
Traders are trying to figure out who stands the best chance of making it to any runoff against right-wing lawmaker Jair Bolsonaro, the front
as opposed to an economic overhaul that would shore up the budgetSwap-rates traders will also monitor two central bank publications after
authorities adopted a more hawkish tone in a statement accompanying their rate decision last week, saying stimulative monetary policy could
be gradually removed if the outlook for inflation deteriorates or risks rise
The short-end of the DI curve is pricing in more than 100 basis points in hikes this yearEconomic Data, Polish Stock UpgradePhilippines
posted a budget deficit of 2.6 billion pesos ($48 million) in AugustChina will release data on industrial profits on Thursday and a private
measure of manufacturing activity on FridayTaiwan reports on industrial production and unemployment on TuesdayThailand will unveil trade
figures and current-account data on FridaySouth African data on producer prices, payrolls, money supply, the trade balance and the monthly
budget balance will give investors clues on whether the country is emerging from a first-half recessionStarting Monday, Polish equities will
have a 0.154 percent weighting in the FTSE Russell Developed All Cap Index, compared with their previous 1.33 percent share in its
and othersPoland presents its August unemployment rate on Tuesday, expected to stay at the lowest since 1990 at 5.9 percent
for October and the whole of the fourth-quarter on Friday
