Emerging-market stocks edged up Monday, with currencies steady as bets on a December rate cut by the Federal Reserve held firm.
An MSCI gauge of developing-market currencies rose as much as 0.1% on Monday. A similar gauge of stocks added 0.2%, led by gains in Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Meanwhile, cryptocurrencies fell sharply, with traders bracing for bigger moves lower.
READ: Chinese Stocks Withstand Vanke Woes as Tech Becomes Key Driver
Traders are keeping bets of a Fed rate cut alive this month, even as they await a slew of data this week including initial jobless claims and headline industrial output data for cues on the US economy. President Donald Trump said Sunday he has decided on his pick for the next Fed chair, which further supported assets from developing markets.
Kevin Hassett, Trump’s chief economic adviser, is seen as the frontrunner for the job, with Trump making clear he expects his nominee to deliver interest-rate cuts. The Bloomberg dollar index was steady, after suffering its worst week since end-June.
“The end of the US data hiatus has solidified expectations for another rate cut in December, despite the FOMC’s increasing uneasiness about inflation persistence,” analysts including Themistoklis Fiotakis at Barclays Bank Plc wrote in a note. “In all, the broader backdrop is supportive for risk sentiment, and it is no wonder that cross-market vol continues to grind lower.”
Emerging market assets are set to wrap up a banner year, with December being a seasonally stronger month for stocks, currencies and debt. Strong performance by bonds from the developing world, alongwith rising concerns around fiscal backsliding in developed markets have led to the start of global debt investors viewing select emerging markets as a safer option.
This article was generated from an automated news agency feed without modifications to text.
