Stocks, FX down slightly as investors watch for US data, Fed decision -December 11, 2023 at 05:36 am EST

* US CPI, Fed decision in focus this week

* Czech’s Nov CPI comes in hotter than expected

* China blue-chips recoup early losses

* Stocks off 0.2%, FX down 0.3%

Dec 11 (Reuters) – Currencies and stocks in emerging
markets began Monday on a sombre note as investors stayed wary
ahead of a crucial U.S. inflation report and the Federal
Reserve’s interest rate decision due this week.

MSCI’s gauge of emerging markets stocks inched
down 0.2%, while a basket of currencies was down
0.3% against the dollar by 1006 GMT.

Friday’s robust U.S. jobs report pushed investors to pull
back expectations for a rate cut, and the focus now shifts to
inflation data due on Tuesday.

Along with the Fed’s monetary policy decision this week,
markets will scrutinise a slew of central bank meetings,
including those of the European Central Bank and the Bank of
England, for insights on the developed markets outlook for
interest rates.

“The Fed is still likely to be more of a slow oil tanker
than a speedboat but will probably acknowledge that barring a
unexpected surprise, the hiking cycle is over but will conclude
that it’s premature to talk about cuts at the moment,” Deutsche
Bank economists said in a note.

In Asia, China’s blue-chip stocks clawed back
early losses to end the session up 0.6%, after a fall of as much
as 1.6% to hit five-year lows, as investors expected more policy
support after disappointing inflation data.

“We continue to argue that while consumer prices fell
further amid weak demand, China is not yet experiencing
deflation, in the sense that the fall in prices has not yet
become entrenched and altered consumers’ inflation
expectations,” Tommy Wu, a senior economist at Commerzbank said
in a note.

In the Middle East, Turkey’s lira hit fresh
record lows of 29 against the dollar after authorities loosened
their grip on the currency in a pivot to more orthodox policies.
The lira last stood 0.3% down, at 28.9970 to the dollar.

Data showed a smaller than expected surplus in Turkey’s
current account balance in October, while industrial production
also fell.

In Central and Eastern Europe, Czech consumer prices rose by
0.1% in November, defying a prediction of a small dip as the
market turned its attention to the size of price markups in
January that will help determine the path for interest rates.

The Czech crown was little changed against the euro.

In South America, Argentine voters may have cause to worry
about new President Javier Milei’s pledge for painful economic
shock therapy, but markets are keen, hoping the libertarian will
give the economy a “firm kick” when he lays out his plan this
week.
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

For TURKISH market report, see

For RUSSIAN market report, see
(Reporting by Siddarth S in Bengaluru; Editing by Clarence
Fernandez)