* Emerging stocks edge up, debt spreads inch in
* Lira weak; oil, inflation, policy outlook weigh
* Shekel hits 1-mth high, inflation expectations up
By Carolyn Cohn
LONDON, March 21 (Reuters) – Emerging assets were broadly
unchanged on Wednesday as investors weighed up the likelihood of
further money-printing by the U.S. Federal Reserve, while the
Turkish lira bounced on hawkish comments on monetary policy from
its central bank.
Following the Greek debt exchange earlier this month and
moves by the European Central Bank which have eased the pressure
on banks and struggling governments, market focus has switched
to the United States from the euro zone.
Comments by Fed officials this week and the Fed’s statement
last week have encouraged investors in the view that there will
be no imminent further quantitative easing from the United
States. This has put pressure on U.S. bond yields and diluted
appetite for carry trade investment in emerging market assets.
But against that is the fact that an improving growth
outlook would be broadly better news for riskier markets, while
Fed Chairman Ben Bernanke also held out the possibility of the
U.S. central bank acting again if need be.
“The market is assessing the new reality,” said Guillaume
Salomon, emerging markets strategist at Societe Generale.
Continued…
