* U.S. Federal Reserve’s two-day meeting starts on Tuesday
* Turkish unemployment dipped in Feb-April period
* MSCI’s EM stocks index down 0.3%; lower for 4th straight day
* EM currencies make minor moves, although Turkish lira firms 0.5%
By Aaron Saldanha
June 17 (Reuters) - Emerging market stocks slipped on Monday, while most developing world currencies traded in narrow ranges against the dollar a day ahead of the start of the U.S. Federal Reserve’s keenly anticipated meeting.
Developing world investors hope the Fed will continue to show patience at its two-day meeting starting on Tuesday, with some pricing in lower U.S. borrowing costs, following a bruising 2018 which saw capital drain away from emerging markets as the Fed boosted returns on holding dollars.
Hints of possible upcoming rate cuts “would be like oxygen for emerging market sentiment in 2019,” Vladimir Miklashevsky, senior economist and trading desk strategist at Danske Bank, wrote in a note.
Miklashevsky added he expects the Fed to deliver an overall dovish message at the meeting, leading to a rate cut in July.
MSCI’s developing world stocks index dropped 0.3%, declining for a fourth straight day. South Korean stocks fell 0.2%, although their peers in China gained as much in the other direction on hopes of further stimulus.
Hong Kong-traded stocks rose 0.5%, gaining for the first time in four sessions. The index was marred by political uncertainty last week due to protests against an extradition bill which was later postponed indefinitely.
MSCI’s emerging market currencies index dipped 0.1%. China’s yuan remained broadly stable, aided by a firmer-than-expected mid-point rate set by the People’s Bank of China.
Turkey’s lira firmed 0.5%, while stocks on the bourse in Istanbul edged higher as the country’s lenders tacked on 1%. Garanti Bankasi rose 2%.
Data on Monday showed Turkey’s unemployment rate eased to 14.1% in the February-April period, declining from its highest level in nearly a decade.
The data comes after ratings agency Moody’s cut Turkey’s sovereign credit rating deeper into “junk” territory on Friday, saying the risk of a balance of payments crisis continued to rise, and with it the risk of a government default.
The Turkish finance ministry questioned the impartiality of Moody’s decision, saying the downgrade was not in accordance with the country’s economic indicators.
Russia’s rouble edged 0.1% firmer, a gain matched by Moscow-traded stocks.
In emerging Europe, Poland’s zloty marked time against the euro, while Hungary’s forint was 0.1% firmer against the common currency.
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see (Reporting by Aaron Saldanha in Bengaluru, Editing by William Maclean)