Emerging-market stocks declined after U.S. payrolls data, while Russian government
bonds were poised for the worst week since 2009 amid speculation
interest rates will rise. The Russian currency climbed.
“A good payrolls number could push yields higher, putting some pressure on EM,” Maarten-Jan Bakkum, an emerging-market strategist at ING Groep NV in The Hague, wrote in an e-mail before the payrolls announcement. “The Russian Central Bank has been intervening in the currency market this week.”
The yield on Russian 10-year bonds climbed for a ninth day, reaching a five-year high. The ruble advanced 1.2 percent against the dollar on speculation Russia is selling foreign currency. China Construction Bank Corp. led a gauge of Hong Kong-traded Chinese shares to a 21-month high.
The MSCI Emerging Markets Index fell 0.2 percent to 984.62 at 1:39 p.m. in London, heading for a 2 percent retreat this week. Today’s data showed that employers in the U.S. added 321,000 jobs in November, the most since January 2012, bolstering the case for an interest-rate increase by the Federal Reserve.
Wagers for Russian interest-rate increases soared to a six-year high. Forward-rate agreements tracked by Bloomberg signaled that policy makers may be preparing to raise rates by 414 basis points in the next three months. The Bank of Russia next meets on rates on Dec. 11.
Currency & Industry
The Russian ruble strengthened for the second time in three days.
Russia’s central bank sold $1.9 billion of foreign currency on
Dec. 3, when the ruble snapped a six-day drop. The Micex Index
lost 1.9 percent, trimming its gain this week to 1.2 percent.
Policy makers may be selling foreign currency today. The 10-year yield jumped 61 basis points to 11.77 percent, bringing its weekly increase to 120 basis points.
AFK Sistema fell to a 5 1/2-year low in Moscow, leading the decline on the benchmark Micex Index. Sistema dropped 11 percent, extending its weekly loss to 30 percent, the worst performance on the Micex. A Russian court will consider an appeal against extending Sistema’s majority owner Vladimir Evtushenkov’s house arrest to March relating to a money-laundering case.
BUX index of Hungary gained for a fourth day, adding 1.7 percent. Equity indexes in Poland, the Czech Republic, Turkey and South Africa climbed at least 0.3 percent. Brazil’s benchmark Ibovespa Index also added 0.3 percent.
The premium investors demand to own emerging-market debt rather than U.S. Treasuries widened one basis point to 317 basis points, JPMorgan Chase & Co. Indexes show.
Five out of 10 industry groups in the emerging-markets measure fell today, led by health-care shares. The MSCI developing-nation gauge has lost 1.5 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4.7 percent in 2014 and is valued at a multiple of 15.6.
China Construction Bank gained 3 percent in Hong Kong. Haitong Securities Co. jumped 12 percent on talks a unit will buy Portuguese investment bank Banco Espirito Santo de Investimento SA. The Hang Seng China Enterprises Index (HSCEI) advanced 1 percent, while the Shanghai Composite Index (SHCOMP) rose 1.3 percent.
