Emerging market stocks steady as oil eases, central bank decisions loom; Brazil in focus after Lula win
EWZ•Emerging market stocks and currencies were mostly steady as oil prices eased and investors awaited central bank decisions. Brazil’s 2037 bond fell 1.1 cents, and the iShares MSCI Brazil ETF plunged nearly 27% in premarket trading after Lula won a fourth term.
1. Brazilian assets under pressure
Brazilian assets were expected to face pressure after the electoral court declared Luiz Inácio Lula da Silva the winner on Sunday. The iShares MSCI Brazil ETF fell nearly 27% in premarket trading, while Brazil’s 2037 international bond lost 1.1 cents to 104.766 cents on the dollar.
2. Markets await rate decisions
MSCI’s emerging market stock and currency benchmarks were flat. Investors awaited central bank decisions, with traders expecting the US Federal Reserve to keep rates unchanged on October 28; oil prices eased after nearing six-month highs last week.
3. Regional moves diverge
India’s rupee fell 0.3%, the Philippine peso dropped 0.5% to a record low, and Indonesia’s rupiah slipped past 18,100 per dollar. Serbia’s 2031 euro bond rose 0.7 cent after Aleksandar Vucic conceded defeat, while the Chinese yuan reached a fresh four-year high against the dollar.
