EMERGING MARKETS-Stocks, FX set for weekly losses after US data fuels rate worries

Emerging market stocks and currencies hit a one-week low on Friday and were on track to log weekly losses, hurt by weakness in China stocks, while the dollar gained after U.S. data led to receding bets of an early rate cut from the Federal Reserve.

MSCI's index of emerging market stocks slipped 1.3% by 0830 GMT, set for its worst day in nearly two months. Chinese property stocks were down and Hong Kong's benchmark Hang Seng dropped 1.4% after China's central bank left the one-year medium-term lending facility rate unchanged, weighing on the broader index.

A gauge of regional currencies fell 0.3%, as the dollar strengthened and U.S. benchmark bond yields surged after a bigger-than-expected rise in U.S. producer prices added to a heated reading on consumer inflation earlier in the week. "The latest PPI data reveals a significant increase. This suggests that inflationary pressures persist not only at the consumer level but also among producers," said Luca Santos, currency analyst at ACY Securities.

"Despite concerns, a positive PPI report has bolstered confidence in an optimistic inflation outlook, thereby strengthening the US dollar." The Turkish lira traded at 32.1950 against a firm U.S. dollar as a central bank survey showed Turkey's consumer price index (CPI) inflation is expected at 44.19% by the end of 2024, up from an earlier estimate of 42.96%.

The South African rand extended losses and fell 0.2% against a strong dollar after a mixed batch of local mining and manufacturing data, while the Russian rouble gained 0.1% against the greenback amid local polls. Israel's shekel rose 0.2% ahead of CPI data at 1200 GMT.

In central and eastern Europe, the Polish zloty was flat against the euro ahead of final January and February CPI data and current account data later in the day. The Czech crown was up 0.2% against the euro as the country's working day-adjusted industrial output remained flat year-on-year in January, after a revised 0.5% fall in December. Analysts polled by Reuters had expected an increase of 2.0% year-on-year.

The Swedish crown was down 0.2% against the euro. Riksbank Deputy Governor Aino Bunge said on Friday that the slowdown in Swedish inflation in February gives the central bank greater confidence that inflation can be stabilized at the 2% target. Meanwhile, Ghana's bonds edged higher after Reuters reported that Ghana's international bondholders had entered into non-disclosure agreements with the government for formal talks to restructure more than $13 billion of international bonds.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)