EMERGING MARKETS-Stocks, FX subdued as US inflation data on watch; Senegal bonds fall

Emerging market assets were muted on Monday, with investors gearing up for a key U.S. inflation print and some regional central bank decisions this week, while Senegal eurobonds fell as opposition candidate Bassirou Diomaye Faye takes early presidential poll lead. The MSCI index for EM stocks, which had made gains last week on the back of the U.S. Federal Reserve's reaffirmation of three rate cuts this year, slipped 0.2%, while the currencies gauge edged up 0.1%.

Emerging market assets were muted on Monday, with investors gearing up for a key U.S. inflation print and some regional central bank decisions this week, while Senegal eurobonds fell as opposition candidate Bassirou Diomaye Faye takes early presidential poll lead.

The MSCI index for EM stocks, which had made gains last week on the back of the U.S. Federal Reserve's reaffirmation of three rate cuts this year, slipped 0.2%, while the currencies gauge edged up 0.1%. Investors awaited the Fed's key inflation gauge - the so-called core personal consumption expenditure (PCE) price index - due on Friday, and any negative surprises on which could put a dent in the expectations for early U.S. rate cuts.

China and Hong Kong stocks dropped on profit-taking in tech and media shares, while the yuan rebounded from a four-month low. Blue-chip CSI300 and Hang Seng indexes fell 0.5% and 0.2%, respectively, while onshore yuan climbed 0.3%. South Africa's rand edged higher against the dollar ahead of a policy decision on Wednesday. Data showed offshore investors sold a net 1.89 billion rand ($99.51 million) of South African stocks last week.

Senegal's international bonds fell as opposition candidate Bassirou Diomaye Faye took the lead in early presidential election results, with investors concerned this may spell a rollback of business-friendly policies. Ghana's cedi fell 0.6%, with eyes on a policy decision later in the day. Central bank data showed the world's number two cocoa producer's economy started to feel the pinch from falling cocoa production, with low exports hurting trade surplus and threatening the cedi.

Most Central and East European nations' currencies edged against the euro, with Hungary's forint climbing 0.3% ahead of a rate decision on Tuesday, expected to deliver a 75-basis-point cut. Sri Lanka is expected to hold rates steady on Tuesday. The rupee climbed 0.2%.

"Quite a few of EM central banks are in a position to cut, and specifically in Asia, we've seen very little action, and that's going to happen eventually as they're in a comfortable position to potentially start to ease," said Michael Bolliger, chief investment officer, emerging markets, UBS Global Wealth Management. "That can help people find catalysts to diversify into some of these lagging markets."

Investors also awaited Turkey's local elections on March 31. Its central bank stunned markets last week with a 500-bps rate hike, seen by analysts as a signal that it was independent from any political constraints. HIGHLIGHTS:

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