Halister News

(Bloomberg) -- Currencies of Russia and South Africa weaken with local bonds after the Federal Reserve affirmed its plan to raise borrowing costs twice more this year.

• MSCI’s EM indexes of stocks and currencies retreat 0.3% each
• Yield premium on developing sovereign bonds over U.S. Treasuries decreases 2bps to 295, lowest on closing basis since 2014: JPMorgan Chase indexes

EASTERN EUROPE:

• RUB declines 0.7% to 57.7650/USD, lowest level in 6 weeks; local bonds due in 2027 fall for 2nd day, yield adds 2bp to 7.62%
  • Finance Ministry to reduce FX purchases starting next week
  • Citi recommends lower-rated Russian corporate bonds for carry
• Turkey’s lira retreats 0.4%; yield on local bonds due in 2026 climb 7bps to 10.23%; Borsa Istanbul 100 Index falls 0.2%
  • Turkcell heads for biggest drop in 2 years after Telia sold a 7% stake in the company at a discount to market price
  • SocGen recommends Turkey Steepener

ASIA:

• S. Korean won weakens 0.2%; Kospi Index climbs 1% to record
  • Current account surplus shrank in March
  • NOTE: Country gears up for presidential election May 9
• Filipino peso advances 0.2%; Philippine Stock Exchange PSEi Index gains 1% to close at highest level in more than 7 months
  • President Rodrigo Duterte’s plan to raise taxes to fund infrastructure projects passed by parliamentary committee, Inquirer reports, but may face delays

AFRICA:

• ZAR declines 0.7% to lowest level in 3 weeks; local bonds due in 2026 set to end 3-day winning streak, yield rises 6bps to 8.72%
  • Government minister seeks land seizure without payment
  • Central Bank Governor Lesetja Kganyago says ending rate hikes doesn’t mean start of cuts
  • Morgan Stanley recommends selling rand
  • READ: Standard Chartered Sees Year of Recovery for African Economy

MIDDLE EAST:

• Main stock index in Abu Dhabi advances 0.8%, bucking declines across rest of Gulf markets
  • Arabtec gains 1.6%, rebounding from 4-day slump of 9.2% after posting 1st quarterly profit since 2014
  • Oil, region’s biggest export, declines 0.6% to near 5- month low

ANALYSIS:

• Russia Takes After Fed as Monetary Policy Veers Off-Script Again
• Cheapest Asian Stocks on Historical Basis Are in Korea: Chart