(Bloomberg) -- Emerging-market currencies posted the longest streak of gains since January 2018 last week and stocks rose to a six-week high as global monetary easing and prospects of a trade truce -- even if a temporary one -- made investors more comfortable with riskier assets. As the European Central Bank cut rates and announced a new stimulus plan, markets are waiting for the Federal Reserve to confirm bets on additional easing.
The following is a roundup of emerging-markets news and highlights for the week ending Sept. 15.
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U.S. officials have discussed offering a limited trade agreement to China that would delay and even roll back some U.S. tariffs in exchange for Chinese commitments on intellectual property and agricultural purchases, according to five people familiar with the matterBefore that, President Donald Trump had said he was postponing the imposition of 5% extra tariffs on Chinese goods by two weeksEarlier, Treasury Secretary Steven Mnuchin said on Fox Business that Washington and Beijing made “a lot of progress” in trade negotiationsThe U.S. is considering an executive order to crack down on shipments of fentanyl and counterfeit goods, according to people familiar with the matter, a move aimed in part at pressuring China to help the U.S. combat its opioid epidemicChina announced a range of U.S. goods to be exempted from 25% extra tariffs put in place last year, as the government seeks to ease the impact from the trade war without lifting charges on major agricultural items like soybeans and porkThe Asian country is considering whether to permit renewed imports of American farm goods including soybeans and pork, according to people familiar with the situationSaudi Arabia’s oil production was cut by half after a swarm of explosive drones struck at the heart of the kingdom’s energy industry and set the world’s biggest crude-processing plant ablaze -- an attack blamed on Iran by the top U.S. diplomatSaudi Aramco has picked a slew of banks to work on its planned initial public offering following intense lobbying by some of the world’s top dealmakers, people with knowledge of the matter saidThe European Central Bank cut the deposit rate to a record-low minus 0.5% and said it’ll buy 20 billion euros ($22 billion) a month of debt for as long as neededNorth Korea delivered a pointed message to the Trump administration -- firing two “short-range projectiles” into its eastern seas hours after saying it was willing to restart nuclear talks with the U.S.Turkey’s new central bank governor delivered another interest-rate cut that exceeded forecasts as he balances calls for drastic easing from President Recep Tayyip Erdogan with the market’s fragile sentiment. The key rate was cut to 16.5% from 19.75% and the lira advancedTrump discussed easing sanctions on Iran to help secure a meeting with Iranian President Hassan Rouhani later this month, prompting then-National Security Advisor John Bolton to argue forcefully against such a step, according to three people familiar with the matterEmerging-market exchange-traded funds received inflows for a second straight week, led by Mexican stocks
Global funds no longer need approval to purchase quotas to buy Chinese stocks and bonds, the State Administration of Foreign Exchange saidChina’s producer price index fell further into contraction, signaling a worsening economic slowdown that threatens to add deflationary pressures to the global economy. Credit growth rebounded faster than expected in AugustThe country is opening the door to soybean meal shipments from Argentina, the world’s biggest exporter of the animal feed, as Beijing looks to pivot away from U.S. agricultural products amid a trade war with WashingtonSouth Korea’s unemployment rate plummeted to the lowest level in nearly six years in August, a rare positive sign for an economy facing headwinds from weak global demandPresident Moon Jae-in appointed to the position of justice minister a close confidant who faced a grilling in the media and in parliament over allegations of corruption and nepotismIndia unveiled measures involving at least $7 billion in stimulus to help exporters and eased overseas borrowing norms for some housing projectsInflation accelerated in August, reaching the highest level since October, while remaining within the central bank’s medium-term targetThe nation has called a meeting of state-run bank chiefs next week to review lenders passing on interest-rate cuts to customers, people with the knowledge of the matter saidBank of Thailand Governor Veerathai Santiprabhob said the baht’s appreciation is a big concern for the country’s exporters. Finance Minister Uttama Savanayana said the central bank closely monitors the currencyThe government is ready to take new economic steps if the ones already rolled out are insufficient, Uttama saidThe World Bank projects Indonesia’s economic growth will slow to below 5% next year and warned of “severe” outflows if global risks worsenThe country expects to complete $10.9 billion of strategic projects this year, according to a statement issued by Coordinating Ministry for Economic AffairsIndonesian sovereign bonds will extend a rally as foreign funds keep chasing high-yield securities amid a global slowdown and a low interest-rate environment, according to a government officialThe nation must speed up reforms aimed at boosting foreign investment and bolstering the economy to counter risks of a global recession, President Joko Widodo saidMalaysia’s central bank kept its benchmark interest rate unchanged at 3% for a second straight meeting as the economy posts steady growth despite mounting global risks. “Domestic drivers of growth, alongside stable labor market and wage growth, are expected to remain supportive of economic activity,” Bank Negara Malaysia said in a statementThe government will need to seek fiscal space in its 2020 state budget to prioritize sustainable economic growth, Finance Minister Lim Guan Eng saidTaiwan’s exports rebounded more than expected in August, as the protracted China-U.S. trade war accelerates manufacturing relocation and the new iPhone launch cycle lifts demandChina again urges the Taiwan’s Democratic Progressive Party to immediately withdraw their “black hands” in Hong Kong, spokesman from China’s Taiwan Affairs Office saidPhilippines’ trade deficit widened to $3.4 billion in July after narrowing in the previous two months, compared with a revised shortfall of $2.4 billion in JuneCurrent account deficit narrowed to $1.7b in 1H from shortfall of $3.8b the year earlierHouse of Representatives approved bill gradually reducing transaction tax rate on listed stocks from current 0.6% to 0.1% in 2024Philippine central bank Governor Benjamin Diokno said another policy rate cut of at least 25 basis points could come as early as this month
South Africa’s longer-maturity debt and the low level of foreign-currency bonds is “more of a strength than a weakness” for the country’s credit rating, according to Moody’s Investors ServiceBusiness confidence slumped to the lowest level since disinvestment from the country over its apartheid policies more than three decades agoFactory output contracted for the second consecutive month in July as the output of petroleum and chemical products and basic iron and steel continued to shrinkTalks around restructuring Eskom Holdings SOC Ltd.’s bonds must be approached carefully to avoid spooking the market, according to S&P Global RatingsThe Nigerian government is holding on to its economic growth projection of 3% this year even after expansion missed forecasts in the second quarterA local court upheld President Muhammadu Buhari’s victory in February elections, dismissing a challenge by the main opposition candidate that sought to overturn the winTurkey’s 12-month rolling current-account surplus widened to the highest level since January 2002 as weak consumer demand continued to curb importsZimbabwean Finance Minister Mthuli Ncube established a Monetary Policy Committee in his latest attempt to stabilize an economy in freefallSerbia’s central bank kept interest rates unchanged at a record low, pausing after two unexpected cuts to assess the impact of looser monetary policy on below-target economic growth and slowing inflation. The benchmark rate was held at 2.5%Surging inflation and a government plan to nearly double the minimum wage weren’t enough to make Poland abandon its pledge to keep borrowing costs at a record-low for the foreseeable future. The central bank left its key rate at 1.5%Romanian inflation slowed for the second month in three, with the lack of sustained direction in prices bolstering the central bank’s stance to keep interest rates on holdCzech consumer prices rose 2.9% from a year earlier in August, exceeding the 2.8% median analysts’ estimate and the central bank’s own projection of 2.6%The Tadawul All Share Index almost wiped out this year’s gains after Saudi Arabia picked banks for the Aramco saleAramco is considering a structure for its initial public offering that would prevent it from marketing the deal directly to fund managers in the U.S., people with knowledge of the matter saidSaudi Arabia held discussions with some of the kingdom’s wealthiest families about becoming anchor investors in Aramco’s mammoth share sale, according to five people with knowledge of the talksLebanon’s government is unlikely to tap international bond markets at current market rates, an official said, days after the indebted country’s finance minister announced plans for a sale of up to $2 billion in NovemberEgypt will approach investment banks “very soon” to advise on a plan to raise between $3 billion and $7 billion from international debt markets by June, a Finance Ministry official saidInflation eased in August to its lowest level since the start of 2013, paving the way for what could be the second-biggest push to cut interest rates across emerging marketsZimbabwe’s central bank raised its main interest rate to 70% to stabilize a plummeting currency and rein in surging inflationUkraine is set to agree on a new loan of about $5 billion from the International Monetary Fund, according to three people familiar with the matter.
Argentina’s recently imposed capital controls are now creating impediments for bondholders looking to collect payments as their securities come dueThe International Monetary Fund is unlikely to grant a $5.4 billion disbursement to Argentina without knowing the economic policy plans of the government that takes over in December, according to people familiar with the situationCountry’s economy minister is headed to Washington this month for more talks on the country’s record International Monetary Fund loan, which has hit trouble after the government imposed capital controls and delayed debt payments amid a market slumpDollar reserves continue to shrink as businesses and savers move money out of banks, increasing the chances that the government will need to tighten capital controls in coming weeksPresidential front-runner Alberto Fernandez is expected to visit Mexico on Sept. 19 to meet with President Andres Manuel Lopez ObradorInflation was little changed at 54.5% in August, less than the 55.4% forecast by analystsMexico’s inflation slowed sharply in August to very near the central bank’s target, bolstering the case for policy makers to lower borrowing costs furtherManufacturing production increased 3% from a year earlier, three times more than economists expected and partly offsetting a drop in the broader industrial sectorState-run oil producer Petroleos Mexicanos tapped the international bond market and announced cash tender offers for outstanding bondsPemex also to receive a $5 billion capital injection from the Mexican government to improve its debt profileLopez Obrador sent Congress a 2020 budget plan that assumes a growth scenario many economists see as too optimisticBrazil’s economy contracted in July after two months of gains, according to a key gauge of activity, as the central bank prepares to cut interest rates again in its efforts to boost growthBrazil-based funds significantly reduced bets on falling interest rates last month as the real slumped 8%Retail sales rose five times more than economists expected in JulyGovernment has announced the rules for an auction of oil drilling rights worth $26 billion, setting the stage for Latin America’s top crude producer to become an even bigger player in the global marketA senior Brazilian lawmaker expressed confidence that the pension reform bill currently in the Senate won’t have to return to the lower house for further scrutiny, a move that would delay the crucial legislation and unsettle investorsThe special secretary for the tax office has resigned amid a fierce debate over the possible introduction of a tax on financial transactionsPresident Jair Bolsonaro has flip-flopped on key appointments to Brazil’s antitrust regulator, leaving the respected body in a state of paralysis and subject to accusations of political interferenceChile will submit a bill to Congress within six months to make it more attractive for foreign companies to sell stocks and bonds in the local market, Finance Minister Felipe Larrain saidPeru’s central bank kept its reference rate unchanged at 2.5% while signaling it’s ready to consider increasing stimulus after the economy’s worst slump in almost decadeThe government’s plan to reduce its fiscal deficit by increasing revenue faces risks due to slower economic growth, Fitch Ratings saidColombia’s economic committees for the Senate and Lower House approved the amount of 271.7 trillion pesos ($81 billion) for the nation’s 2020 budgetGovernment will take on 19.2 trillion pesos in new debt to fund its 2020 budget, Finance Minister Alberto Carrasquilla said
--With assistance from Colleen Goko and Selcuk Gokoluk.
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