By 4 Minute Read* Manufacturing PMIs in Asia and Russia fall* Russia’s GDP rose 10.9 percent year on year in May* Turkey raises reserve requirement ratios on several foreign exchange liabilities* COVID-19 instances in Latin America are on the rise, and Russia has the highest daily death rate. Reuters, 1 July – On Thursday, emerging market equities and currencies got off to a shaky start in the second half of the year, weighed down by weak factory activity data from numerous nations, while increases outside Asia helped to limit losses for the broader indices. Following surveys that showed manufacturing production rose at a slower pace in China and Japan due to rising raw material prices, activity shrank in Vietnam, Malaysia, and India, where governments implemented harsher restrictions to prevent new coronavirus outbreaks. “Concerns about the Delta strain (of the coronavirus) and worries of related news could increase market uncertainty and risk aversion,” said Antje Praefcke, a Commerzbank analyst. On Thursday, COVID-19 deaths in Russia reached a new high, while the Pan American Health Organization cautioned that COVID-19 cases are rising in Latin America and the Caribbean, and immunization is lagging considerably. On Wednesday, the majority of Latam stocks and currencies fell. Currencies in emerging Asia were flat to slightly down, with the Philippine peso hitting August lows and the rand of South Africa losing 0.4 percent. The rouble, on the other hand, gained 0.5 percent against the dollar as oil prices rose ahead of an OPEC meeting. Russia’s economic growth increased by 10.9 percent year on year in May, extending its recovery after a 3 percent drop in 2020, according to data. The dollar remained stable ahead of much-anticipated U.S. jobs data, which will be scrutinized to determine if it prompts the Federal Reserve to begin tightening policy sooner than expected. Turkey’s currency rose 0.3 percent, owing to a rebound in industrial activity and an adjustment to reserve requirement rations by the central bank, which might help shore up depleted foreign reserves as well as lira holdings. A rise in utility prices in Turkey is expected to fuel inflation, which is already in double digits and well above target, and comes as the central bank faces pressure from President Tayyip Erdogan to cut interest rates in the next two months. While several EM market benchmarks in Asia declined, with MSCI’s EM stock index down 0.2 percent, those in developing Europe, the Middle East, and Africa rose in response to Western European equities’ robust start. The MOEX in Russia was hovering around record highs, while Turkish equities surged nearly 1% to snap a four-day losing run and set the stage for their best day in over three weeks. See tmsnrt.rs/2egbfVh for a GRAPHIC of developing market FX performance in 2021. See tmsnrt.rs/2OusNdX for a GRAPHIC on MSCI emerging index performance in 2021. FOR THE LATEST NEWS IN THE EMERGING MARKETS See the market report for CENTRAL EUROPE. See the TURKISH MARKET REPORT. See the RUSSIAN market report (Reporting by Susan Mathew in Bengaluru; Editing by Rashmi Aich)/n
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