Now Reading: Soft US jobs data lifts emerging market stocks, currencies
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Soft US jobs data lifts emerging market stocks, currencies
Emerging-market stocks and currencies rose on Monday after Friday’s unexpectedly weak US jobs report raised hopes that the Federal Reserve will slow its pace of rate hikes. The MSCI gauge of developing-market…
The Story in Brief
Emerging-market stocks and currencies rose on Monday after Friday’s unexpectedly weak US jobs report raised hopes that the Federal Reserve will slow its pace of rate hikes. The MSCI gauge of developing-market stocks climbed 0.7 per cent, set to erase last week’s losses, while an index of emerging-market currencies added 0.2 per cent for a fourth day of gains. Indonesia’s rupiah led the advance. The gains came despite oil prices rising above $84 a barrel on tensions in the Middle East.
Traders now await US consumer price data later this week. BNY strategist Wee Khoon Chong said the strength of emerging-market currencies was driven by last week’s drop in the US dollar, and that US CPI would be the key catalyst for near-term direction. Tech stocks including Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc. contributed most to the equity index’s advance. Indonesia’s benchmark was also heading for a technical bull market on signs of a resilient economy.
The Indian Opinion
One soft jobs report does not mean the Fed has turned dovish, and celebrating a dollar decline too early could be costly for emerging markets. The narrative that rate cuts are around the corner ignores that inflation is still above target and oil prices remain elevated. The real test will come with this week’s US CPI data. If inflation stays sticky, the dollar and EM assets will quickly reverse. How much of the dollar’s drop is priced in? That number will separate hope from reality.
Source: livemint.com
This story was synthesised by AI from the source linked above.
