By Karin Strohecker
LONDON, Oct 17 Emerging stocks and currencies
came under pressure on Monday, weighed down by the dollar
romping to its strongest level in nearly seven months and
long-dated U.S. bond yields climbing higher following comments
by Federal Reserve Chair Janet Yellen.
MSCI's emerging market benchmark weakened 0.5
percent, with bourses across Asia chalking up
solid losses while stocks in South Africa, Turkey
and Russia fell by around 0.5 percent.
Currencies weakened against the dollar and bond
yields clambered higher in many emerging economies after
Yellen said on Friday the Fed may need to run a "high-pressure"
economy to reverse damage from the 2008-2009 global financial
crisis that depressed output.
Her remarks raised speculation that Yellen may be willing to
let inflation run above the bank's 2.0 percent target and
prefer to keep an easy monetary policy stance for a long time.
"She said she would allow the U.S. economy to run a bit
further than normal in terms of monetary policy, which would be
positive for EM, but they are also signalling they want to try
to steepen the yield curve, which could be negative for EM bond
markets - so it's a mixed signal for emerging markets," said
Jakob Christensen, head of EM research at Danske Bank.
Adding to the pressure was U.S. data out on Friday, showing
a rebound in retail sales in September, pointing to solid demand
that reinforces expectations of a Fed interest rate hike in
Currencies bore much of the pain. Turkey's lira
weakened by 0.4 percent in its seventh day in the red, yet
stayed shy of the record low it had hit last week.
Russia's rouble matched that fall, shrugging off a
decision by ratings agency Fitch on Friday to raise its outlook
on Russia's sovereign debt to "stable" from "negative".
South Africa's rand also weakened for the third day,
but losses were less pronounced after the deputy president was
joined by business leaders showing support for Finance Minister
Pravin Gordhan, who faces fraud charges.
The Chinese yuan slumped to its weakest since
September 2010 on a weak central bank guidance rate,
but selling was tempered by caution over possible intervention
by authorities to halt further depreciation.
The picture was similar across central and eastern Europe.
Hungary's forint weakened 0.2 percent against the
euro while Poland's zloty almost matched that fall
after hitting its weakest level in the month earlier in the day.
Investors are also awaiting a raft of global economic data
this week, including U.S. industrial production on Monday, U.S.
consumer prices on Tuesday and Chinese third-quarter gross
domestic product on Wednesday.
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 892.48 -4.55 -0.51 +12.38
Czech Rep 902.93 +3.77 +0.42 -5.58
Poland 1724.93 +5.29 +0.31 -7.22
Hungary 28467.01 +75.00 +0.26 +19.01
Romania 6869.97 -27.40 -0.40 -1.92
Greece 586.78 -2.51 -0.43 -7.06
Russia 978.05 -4.99 -0.51 +29.19
South Africa 44545.04 -113.57 -0.25 -2.73
Turkey 77106.46 -447.75 -0.58 +7.50
China 3041.24 -22.56 -0.74 -14.07
India 27553.87 -119.73 -0.43 +5.50
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 27.01 27.01 -0.00 -0.05
Poland 4.31 4.31 -0.10 -1.29
Hungary 306.46 305.75 -0.23 +2.67
Romania 4.50 4.51 +0.04 +0.32
Serbia 123.02 123.02 +0.00 -1.26
Russia 63.11 62.85 -0.41 +15.59
Kazakhstan 332.15 330.50 -0.50 +2.51
Ukraine 25.77 25.77 +0.00 -7.05
South Africa 14.32 14.31 -0.06 +7.97
Kenya 101.30 101.30 +0.00 +0.89
Israel 3.82 3.82 -0.19 +1.69
Turkey 3.10 3.09 -0.44 -5.99
China 6.74 6.73 -0.15 -3.64
India 66.80 66.71 -0.14 -0.90
Brazil 3.20 3.20 +0.07 +23.68
Mexico 19.02 19.01 -0.09 -9.73
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 356 -1 .05 7 64.74 1
All data taken from Reuters at 09:15 GMT. Currency percent
change calculated from the daily U.S. close at 2130 GMT.
For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
(Additional reporting by Claire Milhench; Editing by Robin