(Bloomberg) -- Emerging-market currencies had the first weekly decline in seven last week as positive developments on a “phase one deal” between the U.S. and China failed to reverse days of largely risk-off sentiment. President Donald Trump’s administration signaled late Thursday that talks with China over the first phase of a broad trade agreement are entering the final stages, though added caveats a day later that a deal is close but not completed. Stocks in developing nations halted a month of weekly gains, falling the most since late September.
The following is a roundup of emerging-markets news and highlights for the week ending Nov. 18.
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U.S. and Chinese trade negotiators held “constructive discussions” in a phone call on Saturday to address each side’s core concerns of phase one of the trade deal.White House economic adviser Larry Kudlow said negotiations over the first phase of a trade agreement with China were coming down to the final stages. Kudlow said a deal is close though “not done yet”President Donald Trump said the U.S. will increase tariffs on China in case the first step of a broader agreement isn’t reached. He also said China is devaluing its currency, supply chains are cracking and they are “dying to make a deal”Trump said trade talks are moving “rapidly”A U.S. demand that China spell out how it plans to reach as much as $50 billion in agricultural imports annually has become a sticking point in negotiations, according to people familiar with the matterChina lowered the cost it charges on open-market operations for the first time since October 2015. The People’s Bank of China cut the interest rate on its seven-day reverse repurchase agreements to 2.5% from 2.55%The country’s economy slowed further in October, signaling that policy makers’ piecemeal stimulus is failing to boost output and investmentFederal Reserve Chairman Jerome Powell stuck to his view that interest rates are probably on hold after three straight reductions, while signaling that the U.S. central bank could resume cutting if the growth outlook faltersTrump renewed his assault against the Fed, saying it was hurting the U.S. by not copying other central banks in deploying negative interest ratesTrump said Wednesday that Turkey’s purchase of a Russian anti-aircraft missile system presents “some very serious challenges” for the U.S., and directed Secretary of State Michael Pompeo to work on resolving the impasseThe Lebanese army was deployed heavily across the country on Wednesday and banks and schools remained shut for a second day as protesters incensed by a call to go home began to converge on the presidential palaceS&P downgraded Lebanon’s long-term foreign currency debt rating to CCC from B-Major political parties agreed to name businessman and ex-finance minister Mohammad Safadi as the country’s new premier, local media reported, a choice that was immediately rejected by anti-government demonstrators pressing for deeper change. Mohammed Safadi put an end to his bid just two days after winning the backing of Lebanon’s major political partiesThe central bank has no plans to impose formal restrictions on the movement of money or force depositors to accept losses, its governor said, but will offer “unlimited” dollars for commercial lenders to finance trade and meet customer demandBanks agreed to lift a restriction on new money coming from abroad and set a withdrawal limit of $1,000 a week for accounts denominated in foreign currency, according to a statement issued Sunday by the Association of Banks in LebanonPresident Michel Aoun appealed to Arab neighbors on Tuesday for help to revive his country’s economyFranklin Templeton said the government will have to renegotiate its debt to stave off an economic collapseEgypt cut its main interest rates by a full percentage point with inflation at the lowest in almost a decade. The deposit rate was reduced to 12.25% and the lending rate to 13.25%Mexico cut the benchmark rate for a third consecutive meeting after inflation slowed to target and economic growth stumbledTwo German citizens were detained by Hong Kong police amid the continuing protests, Deutsche Welle reported, citing an official at Germany’s foreign ministry. The two Germans are receiving assistance from the country’s consulate in Hong Kong, according to the report.Chinese President Xi Jinping called an end to violence Hong Kong’s “most urgent task,” as a scuffle involving the city’s justice minister and the second protest-related death in a week heightened tensions in the paralyzed financial centerHong Kong officials and Chinese state media warned of consequences if violence continued
Chilean stocks and the peso rallied the most in a decade on optimism an agreement over a new constitution will help end protests and riots that threatened to upend the country’s economy
The Chilean peso slumped to a record low amid a wave of social unrest and investor concern about a new constitutionCentral bank announced a $4 billion swap program to ease liquidityChile’s government is willing to increase the minimum pension by more than a proposed 20% in response to the biggest civil unrest in a generation, President Sebastian Pinera said in a televised address late SundayOptimism about a trade deal between the U.S. and China encouraged investors to add $1 billion to emerging-market exchange-traded funds in the week ended Nov. 8, the biggest weekly inflow since Feb.
China wants to balance functionality with concerns about anonymity as it works toward launching a digital version of the yuan, according to an official from the People’s Bank of ChinaForeign companies continue to invest more in China even after Trump called on U.S. firms to look elsewhere, as the rising spending power of 1.4 billion people proves too hard to resistSouth Korea will try to achieve economic growth of more than 2.2%-2.3% next year by providing momentum for an economic rebound, Finance Minister Hong Nam-ki saidBank of Korea board member Lim Ji-won said global data in the past few months show the manufacturing slump is easing slightlyHoldings of overseas alternative assets such as real estate, infrastructure, private equity and debt, and hedge funds by investors rose to at least about 201 trillion won ($172 billion) this year, a record, according to data compiled by Samsung Securities Co. and Korea Investors Service Inc.The U.S. and key allies are seeking to hold a United Nations Security Council debate on North Korea’s human rights record after failing to do so last year, according to diplomats familiar with the discussionsIndia’s trade deficit widened less than estimated last month, as a third-straight month of decline in exports offset a sharp plunge in imports amid weak global demand conditions.The country’s retail inflation quickened for the third straight month in October, breaching the central bank’s 4% medium-term target and possibly slowing the pace of monetary policy easingThe nation is considering changes to its dividend distribution tax that will raise returns for investors, according to people familiar with the matter, as authorities try to revive foreign fund inflowsFactory output shrank to the lowest level in eight years, as a sharp fall in capital goods production underlined weak demand in Asia’s third-largest economyIndia plans to reduce its stake in Indian Oil Corp. to below 51% while ensuring the government and state-run companies retain control of the nation’s largest oil refiner, people with knowledge of the matter saidArcelorMittal won approval from India’s top court to complete its $5.8 billion purchase of a bankrupt steel mill, clearing the way for tycoon Lakshmi Mittal to enter the world’s second-biggest marketIndonesia’s customs cleared nine firms to export nickel ore after briefly suspending shipments for inspection, according to Heru Pambudi, director general of Customs and ExciseExports fell 6.1% in October from a year earlier, while trade balance came in at surplus of $161 millionSoutheast Asia’s largest economy may post higher-than-expected budget deficit next year as govt seeks to maintain growth momentum amid lower revenue, according to Finance Minister Sri Mulyani IndrawatiThai Finance Minister Uttama Savanayana said he plans to issue measures to help boost the economy, while adding past steps didn’t do enough for small businesses. The economy will continue to face high risks next year, so the government needs to be well-prepared, he also saidThailand will try to find new markets for products affected by the suspension of some trade preferences under the U.S.’s Generalized System of Preferences, Commerce Minister Jurin Laksanawisit said. The two nations will speak on the issue in late NovemberMalaysia’s economic growth eased in the third quarter to its slowest pace in a year amid declining exports and weaker factory outputA Malaysian judge ordered ex-premier Najib Razak to defend himself against all charges in the trial involving a former unit of troubled state-owned fund 1MDB
The Philippines central bank kept its key rate unchanged at 4%, opting for what it described as a “prudent pause” to monitor how previous easing steps are filtering through to the economy. It trimmed its 2019 inflation forecast to 2.4% from 2.5%
Business process outsourcing may grow between 3.5%-7.5% annually from 2020 to 2022, IT and Business Process Association of the Philippines President Rey Untal saidThe candidate representing Taiwan’s China-friendly opposition party in January’s presidential race called for free elections in Hong KongPresident Tsai Ing-wen on Sunday named former premier Lai Ching-te as her running mate in January’s election
Istanbul may sell at least $500 million of bonds to fund six metropolitan projects, people with direct knowledge of the plan said, in what would be Turkey’s first municipal debt issuance in 27 yearsTurkish industrial output expanded on an annual basis for the first time in 13 months in September, a sign that the economy is finding its footing after a recession last yearPresident Recep Tayyip Erdogan said interest rates will fall further and again boasted that his firing of the central bank governor has permitted a sharp drop in borrowing costs since JulyPoland’s Premier Mateusz Morawiecki picked Tadeusz Koscinski, a former banker, to become the country’s fifth finance minister in as many months as the ruling Law & Justice party shuffles its cabinet after last month’s electionTens of thousands of Czechs thronged the streets of Prague in one of the largest anti-government protests in the country since the fall of communism, calling on their billionaire prime minister to step down
Russian economic growth accelerated to 1.7% in the third quarter, the fastest pace this year, after the central bank delivered four consecutive rate cuts
Russia is planning to cut the dollar’s share in its $125 billion sovereign-wealth fund, following a major move last year out of U.S. assets by the central bankThe nation skipped a weekly sale of fixed-coupon bonds for the first time since December, citing rising market volatility as bond yields climbedEgypt sold its longest Eurobond on record, part of a $2 billion deal, as it seized on appetite for riskier assets and spread out the burden of servicing its debtMorocco hired a consortium to arrange a euro-denominated bond offering of 12- or 20-year maturity to investors, according to a person familiar with the matterSaudi Aramco’s gigantic initial public offering could see retail investors returning to the Riyadh stock exchange as local individuals snap up shares in the world’s most profitable companySaudi Arabia put a preliminary valuation on its state-owned oil giant Aramco of between $1.6 trillion and $1.71 trillion, short of the $2 trillion target set by Crown Prince Mohammed bin Salman in 2016Efforts to resolve the standoff between Qatar and a Saudi-led bloc are gathering momentum, with an upcoming soccer tournament in Doha helping to pave the way for a possible breakthrough, according to a Gulf official with knowledge of the matterIsrael’s economy accelerated thanks to both public and private spending, overcoming disruptions in world trade that have threatened local growthSouth African retail sales climbed at the weakest pace in six months in SeptemberGhana will ramp up spending by a fifth next year and plans to raise as much as $3 billion in international markets as it prepares for an election in 13 monthsYields on Nigeria’s one-year Treasury bills fell on Thursday to the lowest since April 2016, while demand for three-month debt surged to a record as local funds pile into the debt after the central bank restricted their access to its higher-yielding securitiesKenya’s 47 counties can begin raising state-guaranteed debt next year, potentially heaping more liabilities on the over-leveraged East African economy
Chile took a major step toward solving the social crisis that has convulsed the nation for the past month when lawmakers from almost all the parties agreed early on Friday to a mechanism to rewrite the constitutionChile’s government said that it backed plans to rewrite the constitution, weakening the peso by almost 4% in the week, the worst performance among all currencies in emerging marketsGovernment has also said it would pull $1 billion from its sovereign wealth fund in the next few days to help finance increased spendingThe $4 billion credit line opened by Chile’s central bank Thursday fueled a rise in the peso forward marketBrazil launched an employment program that could generate 1.8 million new jobs by 2022, according to an estimate by the Economy MinistryPresident Jair Bolsonaro confirmed he will leave the PSL party and create a new one called “Aliança pelo Brasil,” meaning “Alliance for Brazil”After a pension reform became law this month, Bolsonaro’s administration is now prioritizing measures that increase control over the federal budgetBrazil’s economy likely grew in the third quarter according to a key gauge, indicating a record-low policy rate and government measures are buttressing demandRetail sales notched the fifth straight monthly increase in SeptemberFormer President Luiz Inacio Lula da Silva, who left jail earlier this month after a Supreme Court decision, used a more radical tone in his speechesThe hacker behind a cyberattack that has crippled Petroleos Mexicanos’s computer systems is hoping to squeeze almost $5 million out of the company and appears to have set a deadline of Nov. 30Bolivia’s Evo Morales accepted Mexico’s offer of political asylum, thrusting leftist President Andres Manuel Lopez Obrador’s government into the center of a crisis that has split Latin America’s government allegiancesOpposition lawmaker Jeanine Anez declared herself interim president as the ouster of Morales plunged the nation into a constitutional crisis, triggering a clash between the police and Morales supporters in La PazNew finance minister Jose Parada ruled out changes in the level of the currency
Argentine President-elect Alberto Fernandez is preparing to task the country’s central bank with trying to boost the crisis-torn economy through a weak exchange rate, according to two people with direct knowledge of the strategy
Fernandez said he will probably announce the economic team on Dec. 10 when he takes officeFernandez said he’ll review the government’s spending plans for 2020 and suggested his predecessor’s draft budget was faultyArgentina bondholders are so worried that the country’s new leader may default that they’ve pushed yields on local notes due two days after his Dec. 10 inauguration to an ear-popping 100%Three hedge funds are demanding more than 384 million euros ($425 million) from Argentina in a U.K. lawsuit that alleges the country restated economic figures to avoid paying out on securities tied to its growthArgentina is lifting controls on crude oil and fuel prices, leaving drillers and refiners to work out how to get back to market levels, according to two people familiar with the matterColombia’s economy grew at its fastest pace in four years as migration from Venezuela and accelerating credit growth boost consumer demandParaguay plans to issue a global bond for approximately $500 million in the first quarter of next year, according to Finance Minister Benigno Lopez
--With assistance from Selcuk Gokoluk, Colleen Goko and Carolina Wilson.
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