* Peru cenbank raises benchmark interest rate to 6.75% * China inflation slows in August as COVID saps demand * EU member
* Peru cenbank raises benchmark interest rate to 6.75%
* China inflation slows in August as COVID saps demand
* EU members to debate Russian gas price cap
Sept 9 (Reuters) – Currencies across emerging markets
strengthened on Friday as the dollar recoiled from recent peaks,
while stocks were led higher by Chinese equities on hopes of
more stimulus from Beijing.
MSCI’s index of emerging market (EM) currencies rose 0.4%
, while stocks jumped 1.2% and were
headed for their best day in more than two weeks. China’s
blue-chip CSI 300 Index advanced 1.4%, while the
Shanghai Composite Index gained 0.8%.
China’s consumer and producer prices rose at a slower pace
than expected in August, data showed on Friday, fanning hopes
for more stimulus from the government.
“Consumer price inflation fell in August and remains below
the PBoC’s (People’s Bank of China) preferred ceiling of 3%,
leaving room for the bank to ease policy further,” said Zichun
Huang, an economist at Capital Economics.
“Although core inflation may inch up if demand becomes
stronger when the COVID situation improves, it is likely to be
offset by lower fuel and food inflation. The PBoC lowered most
policy rates in August, and we continue to anticipate more rate
cuts during the rest of the year.”
Currencies were set to slip 0.2% for the week dominated by
economic data and central bank moves, while stocks were on pace
for a decline of 0.4%.
EM equity fund outflows for the week increased substantially
to the highest since December 2021 at $3.8 billion, compared
with outflows of $596 million a week earlier, according to
JPMorgan.
Among Central and Eastern European currencies, Hungary’s
forint was up 1.7% on the week, while Poland’s zloty
and the Czech crown were set for gains of 0.3% each
.
Poland’s central bank could hold rates next month or opt for
a small increase, Governor Adam Glapinski said on Thursday,
after raising rates by 25 bps earlier this month, the smallest
increase in its current rate hike cycle so far.
“We could see further appreciation (in CEE FX)… Today’s EU
meeting could bring a further drop in gas prices and additional
support for the CEE, but nothing changes the previous arguments
for weaker FX and the narrow influence of gas prices should not
last forever,” said ING strategist Frantisek Taborsky.
A proposed European price cap on Russian gas goes against
European and Hungarian interests, Hungarian Foreign Minister
Peter Szijjarto said, ahead of an emergency meeting of EU energy
ministers where they are set to discuss ways to tame energy
prices.
Elsewhere, Peru’s central bank raised its benchmark interest
rate by 25 bps to 6.75% on Thursday, another consecutive hike in
this cycle.
For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
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(Reporting by Anisha Sircar in Bengaluru; Editing by Subhranshu
Sahu)
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