LONDON, July 17 (Reuters) – Hopes that the U.S. Federal
Reserve will hint at more monetary stimulus pushed emerging
equities higher for the third straight session on Tuesday while
currencies firmed, led by oil-reliant Russian assets.
Weak U.S. data and a cut in the International Monetary
Fund’s global growth forecast have encouraged markets to
position for more action by central banks, especially the Fed,
whose boss Ben Bernanke is due to speak later in the day.
Emerging equities climbed 0.7 percent, with
emerging Europe gaining almost 1 percent thanks
to a 1.5 percent jump in Moscow’s dollar-denominated equity
index to a 12-day high.
Brent crude prices are now above $103 per barrel after
falling below $90 a few weeks ago. The rouble firmed half a
percent versus the dollar, leading EM currency gains.
Central European currencies also rose, helped by the ZEW
report that showed German investor sentiment fell less than
expected in June.
The Hungarian forint rose 0.35 percent against the euro
as a joint IMF/EU mission started its July 17-25 visit
to Budapest for the first round of aid talks.
Romania’s leu edged slightly above record lows hit on Monday
and 5-year credit default swaps fell 22 bps, according
to Markit, as the government bowed to EU pressure, passing a law
that raises the chances that the suspended President Traian
Basescu will survive an impeachment vote.
But fears remain for the recession-hit economy, with a 5
billion euro IMF aid deal at risk and the prime minister warning
of “political paralysis” if Basescu stayed in office.
Elsewhere, Tunisia’s debt insurance costs eased from
three-year highs after the ruling Islamist party re-elected the
moderate Rachid Ghannouchi as its leader.
Continued…
