Emerging Markets stocks rise as oil retreats; all eyes on Fed rate call

Investor focus is now squarely on the Fed's interest rate decision later in the day in the wake of rising inflation concerns, with traders pricing in a 91.1% probability of a quarter-point hike, according to data compiled by LSEG. "If the Fed fails to hike or sounds less hawkish than the market expects, we doubt this will be good for bonds... as the market frets that the world's most important central bank will lose control of inflation," said Kathleen Brooks, research director at XTB. Emerging market stocks rose broadly on Wednesday as easing oil prices and global bond yields steadied sentiment, while currencies were mixed against a softer U.S. dollar ahead of the closely watched Federal Reserve policy decision later in the day. MSCI's EM stocks gauge `.MSCIEF` gained 0.5% and was on track to snap a four-day losing run, while a corresponding currency index `.MIEM00000CUS` was flat. Tech heavyweights South Korea KOSPI and Taiwan `.TWII` gained 1.4% and 0.7%, respectively. Both indexes broke a four-day losing streak after calls for slowing down the development of AI technology led to a selloff in both markets earlier this week. The Korean won `KRW=KFTC` eased 0.2%, while the Taiwanese dollar `TWD=` gained 0.1%. The yield on the Korean benchmark 10-year treasury `KR10YT=RR` note fell 3.5 bps to 4.553%, retreating from near two-month highs. Investors took comfort as oil prices and a global bond sell-off, which rattled risk sentiment in the past few sessions, eased. Higher crude prices are a drag on developing-market economies as most are net energy importers, widening their current account deficits. Across emerging Europe, most currencies were range-bound, but Hungary's forint `EURHUF=` weakened 0.3% against the euro. Assets in the Czech Republic were trading in a narrow range. Markets are looking to the central bank's rate decision later this week, where it is expected to keep its benchmark rate steady at 3.75%. Stocks in the region were mixed, with the Hungarian stocks `.BUX` gaining 0.4%, while Romanian shares `.BETI` dropped 2.5%. South African equities `.JTOPI` eased 0.7%, while the rand `ZAR=D4` was flat ahead of the retail sales data later in the day. South African inflation expectations stabilised in the third quarter, a survey showed on Wednesday. Elsewhere, the World Bank's International Development Association priced a $3 billion bond from an order book of nearly $8 billion, a source familiar said. The deal marks IDA's first U.S. dollar issuance since it received an exemption from U.S. Securities and Exchange Commission allowing the lending arm to raise funds in U.S. markets more cheaply and efficiently. Back in Asia, stocks in the Chinese mainland gained on Wednesday, with the blue-chip CSI300 index `.CSI300` and the benchmark Shanghai Composite index `.SSEC` rising 0.7% each. The yuan `CNY=CFXS` firmed against the dollar. Separately, China's slower loan growth is becoming the new normal as shrinking property and local government sectors sap credit demand faster than emerging industries can fill the gap, central bank governor Pan Gongsheng said.

Emerging Markets stocks rise as oil retreats; all eyes on Fed rate call

Fed decision in focus as traders price in a hike

Emerging market stocks gain as oil and yields ease

Emerging Europe, South Africa and World Bank bond update

China shares rise; governor says slower loan growth is the new normal

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