Emerging markets trim weekly gain as ECB adds to Fed anxiety
Emerging market stocks, currencies fell for the first time this week as investor sentiment soured on ECB's pledge to cut debt purchases and the prospect of higher Fed rates loomed
Moscow/Lagos: Emerging-market stocks and currencies fell for the first time this week as investor sentiment soured on the European Central Bank’s pledge to cut debt purchases and the prospect of higher US interest rates loomed.
Assets in developing nations climbed this week before the European Central Bank announced plans on Thursday to extend quantitative easing until the end of 2017, while at the same time cutting monthly debt purchases. Eastern European currencies dropped the most among peers on the statement. Traders now turn their attention to next week’s Federal Reserve meeting with odds for an interest-rate increase at 100%.
“Emerging markets face a difficult balancing act in 2017," said Societe Generale SA analysts including Guy Stear and Jason Daw. “Domestic fundamentals are improving, but the developed world is becoming more protectionist, weighing on global growth potential in an environment of rising US interest rates, ECB tapering, and surging political risks in Europe." Bloomberg
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