Stocks Rally on Dovish Central Banks, China Data: EM Week Review

(Bloomberg) -- Emerging-market stocks and currencies rose for a second week as major central banks reaffirmed a dovish tone and Chinese activity data soothed investor concerns about the state of the world’s second-largest economy. Assets eked out gains even as the International Monetary Fund cut global growth forecasts..The following is a roundup of emerging-markets news and highlights for the week ending April 12..Asset Moves as of 4:17 p.m. in New York on Friday :WeeklyMSCI EM stocks index+0.4%MSCI EM FX index+0.3%Bloomberg Barclays Global EM Local Currency bond index (Up to Thursday) +0.1%.Highlights:.China’s exports rebounded after the Lunar New Year holiday, while a continued slide in imports underscored the fragility of the domestic economy. Credit growth rose more than expected in MarchMario Draghi signaled that the European Central Bank expects to rely on long-term bank loans and tweaks to its negative interest-rate policy as a first defense if officials need to intensify their fight against the economic slowdownFederal Reserve officials signaled they’re prepared to move interest rates higher or lower as needed, but an unusual mix of risks means they could remain on hold all yearThe IMF cut its forecast for global growth to the lowest since the financial crisis amid a bleaker outlook in most major advanced economies and signs that higher tariffs are weighing on tradePresident Donald Trump’s administration is proposing tariffs on some $11 billion in imports from the European Union in response to subsidies provided to Boeing Co. rival Airbus SEDemand for Saudi Aramco’s debut bond offering was so robust that it allowed the energy giant to borrow at a lower yield than its sovereign parent, underscoring the global chase for yieldThe bonds subsequently sank for two days though, calling into question the depth of the deal’s $100 billion of investor orders Trump rejected calls for confidence-building economic projects with North Korea, in a blow to South Korean leader Moon Jae-in’s efforts to restart nuclear talks with Kim Jong Un.ASIA:.Kim Jong Un urged a “severe blow” to those imposing sanctions on his country and told his ruling party to push for “self-reliance,” signaling his determination to hold the line in talks with TrumpWhile employment growth accelerated for the second straight month in South Korea, the number of jobs for people age 30-49 extended its years-long decline amid a slowdown in manufacturing that is hurting family breadwinnersThe Philippines central bank is on course to cut its key interest rate as inflation cools, with a reduction as early as the May 9 meeting, Governor Benjamin Diokno saidChina consumer prices surged on the back of temporary food supply factors, while factory inflation provided further evidence of a nascent economic recoveryIndonesia’s foreign reserves rose to $124.5 billion at end-March, an 11-month high, according to the central bankIndia’s headline inflation quickened to a five-month high, adding to concern that a rebound in oil prices poses a risk to the benign inflation expectations that last week allowed the central bank to deliver its second rate cut of 2019.EMEA:.Turkey’s election board rejected a request by the ruling party for a full recount of votes in Istanbul after President Recep Tayyip Erdogan pushed for a rerun of the local election in the nation’s largest city following his party’s defeat thereTreasury and Finance Minister Berat Albayrak announced the biggest capital injection to banks in 18 years to help them cope with rising bad loans as the economy grapples with recessionErdogan said he’s going ahead with the controversial purchase of a Russian air-defense system over U.S. objections as Kremlin leader Vladimir Putin urged even closer military ties between the two countries The South African Reserve Bank is steadfast that it wants to see inflation expectations anchored at the 4.5 percent midpoint of its target range, Governor Lesetja Kganyago saidRussia notched up its latest debt-sale record, seizing on appetite from yield-hungry investors in a placement that underscored how sanction concerns are easing. Wednesday’s auctions were the latest in a string of record-breaking local debt offerings in Russia this yearCzech inflation accelerated to the fastest pace in over six years in MarchA surge in food and fuel prices helped lift Hungary’s inflation rate toward the top of policy makers’ tolerance band, testing the central bank’s commitment to restraint in monetary tighteningRomanian inflation accelerated to the fastest in five months on higher food and fuel prices, supporting the central bank’s recent hawkish stanceThe EU called on Libyan warlord Khalifa Haftar to stop his advance on Tripoli, but -- after a day of objections from France and other member states -- the long-delayed statement doesn’t mention him by name.Latin America:.Brazil’s political jitters resurfaced as local media reported the lower house speaker Rodrigo Maia is being investigated for receiving bribes, increasing concern about the outlook for the pension reform bill as he is the lawmaker that sets the Lower House’s scheduleMaia renewed criticism of President Jair Bolsonaro, saying he needs to improve relations with Congress if he wants to win approval of his flagship pension reform proposal Petrobras backtracked on a fuel price increase after pressure from the government, a move that sparked concerns among the investment community Annual inflation last month jumped above the official target to the highest level in more than two years on rising food and transport costs, while February retail sales were flat from the previous month Bolsonaro signed a proposal on central bank autonomy; bill now goes to congressMexico’s March inflation accelerated largely in line with expectations and remained just within the central bank’s target range, supporting expectations for a rate cut this yearIn the first sign of a division within the current central bank board, Gerardo Esquivel voted against the statement that accompanies the decision, saying it was unnecessarily restrictivePresident Andres Manuel Lopez Obrador is calling on fuel, liquid petroleum gas and natural gas distributors to review their profit margins and pass on more tax savings to consumersMexico plans tax changes for corporations and people to help fund Pemex, said an U.S. energy officialArgentina’s Chief of Staff Marcos Pena denied local media reports that the government will freeze some food prices to fight inflationEconomy is “at the point where it’s going to bottom out,” said IMF’s Managing Director Christine Lagarde An election poll showed a tight race in a possible runoff, with President Mauricio Macri at 44.3 percent and Cristina Kirchner at 45 percentCountry’s risk premium hit the highest level since Macri took office more than three years ago The IMF suspended Nicolas Maduro’s access to almost $400 million of special drawing rights for Venezuela, citing political chaos since National Assembly President Juan Guaido claimed in January that he was the nation’s rightful leader, said two people familiar with the matterPeru kept borrowing costs at an eight-year low on expectations an acceleration in inflation will be short-lived as the economy grows below potential and the global outlook deteriorates.Upcoming Data and Economic ReleasesFor Asia, click hereFor Eastern Europe, click hereFor Latin America, click here.--With assistance from Philip Sanders..To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.net.To contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Karl Lester M. Yap, Joanna Ossinger.©2019 Bloomberg L.P.

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Stocks Rally on Dovish Central Banks, China Data: EM Week Review

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