(There will be no EMEA emerging markets report on December 26, 27 due to Christmas and Boxing Day; Reuters will begin coverage from December 28)
Strong US economic data rekindles Fed concerns
The S.African rand is the best week in six
2022 has shocked, shaken and shook global markets this year
By Shreyashi Sanyal
Dec 23 (Reuters) – Emerging market stocks fell on Friday, heading into the holiday weekend on a lower note after strong U.S. economic data confirmed views that the Federal Reserve may need to be more accommodative. while the South African rand eyed big weekly gains.
MSCI’s index of EM shares fell 1%, heading for its second straight week of declines as global risk eased after weekly US jobless claims data showed the labor market remained tight, while The US economy returned faster than previously estimated in the third. quarter
The reading drew attention to the Fed, which last Wednesday raised its policy rate by 50 basis points to 4.25%-4.50%, the highest since late 2007.
Much of the year’s movement in financial markets has been dominated by dovish central bank policy from major economies, hurting many risk assets, including those in emerging markets on concerns that tighter monetary cycles are here to stay for a while. stay longer. The MSCI index for EM stocks is down 22.5% for the year.
Edward Moya, senior market analyst at OANDA, said: “The central bank’s withdrawal from global coordination has not yet fully impacted most economic readings for major economies and this should make investors nervous about lower yields and credit risks.”
Global output fell by $14 trillion, heading for its second-worst year on record, but in that time there have been nearly 300 interest rate hikes and a third of 10% hikes amid an unprecedented surge.
Currencies in the developed world improved on the day, with the South African rand strengthening 0.5% against the dollar, looking at gains of 2.8% for the week, the most in six months. Johannesburg’s stock markets rose by 0.1 percent.
Financial markets in Africa’s most industrialized region took a shot in the arm after President Cyril Ramaphosa was re-elected as leader of the country’s ruling party.
The Russian ruble extended a slight recovery in the previous session, on some support from the month-end tax period amid fears over oil and gas sanctions unsettling markets.
The Turkish lira weakened to 18.7 against the dollar, extending its losses this year to 40%, even as Ankara continues its strict policy of controlling the value of the lira. For a GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For a GRAPHIC on MSCI advanced index performance in 2022 , see https://tmsnrt.rs/2OusNdX.
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For RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shailesh Kuber)