EMEA Stocks and FX Tick Lower, but Set for Bumper November

Nov 30 Reuters Most emerging markets in Europe, Middle East and Africa retreated on Monday, but were set for stellar monthly gains as a combination of optimism over a COVID19 vaccine and stable U.S. politics drove buying of riskdriven assets.

Turkeys lira was set to outperform its regional peers with a near 7 monthly gain, while Istanbul stocks were set for their best month in more than 11 years.

The lira rose slightly versus the dollar after data showed the countrys economy rebounded more than expected in the third quarter, after contracting nearly 10 in the prior quarter.

Assets in Turkey benefited from improving investor confidence after changing its central bank head and finance minister. But overall sentiment was still mixed, owing to surging COVID19 cases and fiscal weakness.

Q4 will feature much calmer activity because the corona second wave took hold not only in Turkey but, crucially, in Turkeys trading partners. Q3 GDP data are not only backwardlooking, but also unlikely to be replicated again in coming quarters because the underlying policy mix has changed, Tatha Ghose, FX and EM analyst at Commerzbank, wrote in note.

Broader emergingmarket assets were also set for large monthly gains on the back of a series of positive COVID19 vaccine updates.

Joe Bidens U.S. presidential win also bolstered hopes for calmer trade policies in the worlds largest economy.

The MSCIs index of emergingmarket stocks was set for its best month since March 2016, up about 10 in…

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