{"id":558548,"date":"2021-08-16T04:02:01","date_gmt":"2021-08-16T04:02:01","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/16\/emerging-market-currencies-could-see-a-selloff-if-us-yield-spike-continues\/"},"modified":"2021-08-16T04:02:01","modified_gmt":"2021-08-16T04:02:01","slug":"emerging-market-currencies-could-see-a-selloff-if-us-yield-spike-continues","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/16\/emerging-market-currencies-could-see-a-selloff-if-us-yield-spike-continues\/","title":{"rendered":"Emerging-market currencies could see a selloff if US yield spike continues"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-09\"><\/a> <strong>Emerging-market currencies poised for selloff amid possible US yield spike?<\/strong> Developing-nation currencies may suffer losses amid a possible sharp rise in US real yields as inflation rises and the mitigating effects of China's economic rebound fade, according to <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-08-15\/u-s-yields-set-to-tighten-grip-on-emerging-market-currencies?srnd=premium-middle-east&sref=mmeFTDW1\">Bloomberg<\/a>. Emerging-market currencies saw their biggest losses since July 9 as the two-year yield jumped last week, while the benchmark gauge for emerging-market currencies has fallen about 2% from a record in June and is close to wiping out its gains this year. EM currencies could see their losses deepen further if key economic indicators \u2014 including China\u2019s industrial production and South African consumer prices \u2014 point to a worsening macroeconomic forecast.<\/p>\n<p><strong>US and European banks make rebound the theme of the quarter amid stellar earnings: <\/strong>Most banks in the United States and United Kingdom have taken back reserves they set aside last year for pandemic-related operational risks \u2014 ditto European banks \u2014 as their second-quarter investment banking revenues skyrocketed to outstrip pre-pandemic levels, driven by a flurry of M&A and capital markets activity, <a href=\"https:\/\/www.ft.com\/content\/7c10e680-0cb0-4b78-9baa-ec3807f5780b\">the Financial Times<\/a> reports. Reduced loan loss provisions, as well as fewer than expected defaults thanks to government stimulus programs also buoyed the positive earnings, and put banks on track to weather the long term economic effects of covid-19.<\/p>\n<p><strong>Ethiopian banks were over the weekend ordered to temporarily suspend lending on loans <\/strong><strong>backed by collateral<\/strong>, after authorities suspected the money was being used on the black market, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-08-13\/banks-ordered-to-temporarily-suspend-lending-in-ethiopia?sref=mmeFTDW1\">Bloomberg<\/a> reports. The national bank directive comes amid a civil war in Ethiopia\u2019s northern region, and after inflation rates reached a decade-high of 24.6%.<\/p>\n<p><strong>If you squint right, a US bill may just have made crypto legit:<\/strong> The crypto market soared over the weekend despite the US Senate\u2019s passing of an infrastructure bill last week that would impose broad oversight of the sector through tax reporting rules, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-08-15\/crypto-market-retakes-2-trillion-market-cap-amid-bitcoin-gains?srnd=premium-middle-east&sref=mmeFTDW1\">Bloomberg<\/a> reports. Analysts noted that the passing of the bill may have sent the signal that crypto is here to stay as a part of the financial system, calling the legislation \u201ca legitimizing event.\u201d<\/p>\n<p><strong>Aramco will join forces with <\/strong><strong><a href=\"https:\/\/www.acwapower.com\/news\/acwa-power-announces-financial-close-for-1500-mw-sudair-solar-plant-and-aramco-joining-the-consortium-under-pif-renewables-program\/\">ACWA power<\/a><\/strong><strong> to build a USD 1 bn solar power plant in <\/strong><strong>Saudi Arabia: <\/strong>Dubbed the <a href=\"https:\/\/acwapower.com\/en\/projects\/sudair-pv-ipp\/\">Sudair solar project<\/a>, the plant will be the largest in Saudi Arabia when it starts production in 2H2022.<\/p>\n<div class='stock-ticker-panel'>\n<table class='table stock-ticker-table table-striped markets-table'>\n<tbody>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>EGX30 <\/strong><\/p>\n<\/td>\n<td>\n<p> 11,029.56<\/p>\n<\/td>\n<td>\n<p>+1.3% (YTD: +1.7%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-down'>\n<td class='td-list-down'>\n<p><svg class='e-icon e-TypeMarkets1'><use xlink:href='#e-TypeMarkets1'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong><a href=\"https:\/\/www.cbe.org.eg\/ar\/EconomicResearch\/Statistics\/Pages\/ExchangeRatesListing.aspx\">USD (CBE)<\/a><\/strong><\/p>\n<\/td>\n<td>\n<p>Buy 15.65<\/p>\n<\/td>\n<td>\n<p>Sell 15.74<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-none'>\n<td class='td-list-none'>\n<p><svg class='e-icon e-TypeMarkets'><use xlink:href='#e-TypeMarkets'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong><a href=\"https:\/\/cibeg.com\/en\/currency-converter\">USD at CIB<\/a><\/strong><\/p>\n<\/td>\n<td>\n<p>Buy 15.65<\/p>\n<\/td>\n<td>\n<p>Sell 15.75<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-none'>\n<td class='td-list-none'>\n<p><svg class='e-icon e-TypeMarkets'><use xlink:href='#e-TypeMarkets'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>Interest rates CBE<\/strong><\/p>\n<\/td>\n<td>\n<p>8.25% deposit<\/p>\n<\/td>\n<td>\n<p>9.25% lending<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>Tadawul<\/strong><\/p>\n<\/td>\n<td>\n<p>11,351.63<\/p>\n<\/td>\n<td>\n<p>+0.25% (YTD: +30.64%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>ADX<\/strong><\/p>\n<\/td>\n<td>\n<p>7,601.64<\/p>\n<\/td>\n<td>\n<p>+0.1% (YTD: +50.67%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>DFM<\/strong><\/p>\n<\/td>\n<td>\n<p>2,815.96<\/p>\n<\/td>\n<td>\n<p>+0.05% (YTD: +13.00%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>S&P 500<\/strong><\/p>\n<\/td>\n<td>\n<p>4,468.00<\/p>\n<\/td>\n<td>\n<p>+0.16% (YTD: +18.95%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>FTSE 100<\/strong><\/p>\n<\/td>\n<td>\n<p>7,218.71<\/p>\n<\/td>\n<td>\n<p>+0.35% (YTD: +11.74%)<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-down'>\n<td class='td-list-down'>\n<p><svg class='e-icon e-TypeMarkets1'><use xlink:href='#e-TypeMarkets1'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>Brent crude<\/strong><\/p>\n<\/td>\n<td>\n<p>USD 70.59<\/p>\n<\/td>\n<td>\n<p>-0.01%<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-down'>\n<td class='td-list-down'>\n<p><svg class='e-icon e-TypeMarkets1'><use xlink:href='#e-TypeMarkets1'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>Natural gas <\/strong>(Nymex)<\/p>\n<\/td>\n<td>\n<p>USD 3.86<\/p>\n<\/td>\n<td>\n<p>-1.83%<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-up'>\n<td class='td-list-up'>\n<p><svg class='e-icon e-TypeMarkets11'><use xlink:href='#e-TypeMarkets11'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>Gold<\/strong><\/p>\n<\/td>\n<td>\n<p>USD 1,778.20<\/p>\n<\/td>\n<td>\n<p>+1.51%<\/p>\n<\/td>\n<\/tr>\n<tr class='tr-row-down'>\n<td class='td-list-down'>\n<p><svg class='e-icon e-TypeMarkets1'><use xlink:href='#e-TypeMarkets1'><\/use><\/svg><\/p>\n<\/td>\n<td>\n<p><strong>BTC<\/strong><\/p>\n<\/td>\n<td>\n<p>USD 46,876.91<\/p>\n<\/td>\n<td>\n<p>-0.36% (as of midnight)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><strong>THE CLOSING BELL-<\/strong><\/p>\n<p><strong>The EGX30 rose 1.3% at yesterday\u2019s close<\/strong> on turnover of EGP 1.55 bn (14.2% above the 90-day average). Local investors were net sellers. The index is up 1.7% YTD.<\/p>\n<p><strong>In the green:<\/strong> Speed Medical (+4.6%), Egypt Kuwait Holding (+4.4%), and CIB (+3.0%).<\/p>\n<p><strong>In the red:<\/strong> Raya Holding (-2.5%), TMG Holding (-2.4%), and Medinet Nasr Holding (-2.2%).<\/p>\n<p><strong>Asian markets are, with the exception of Shanghai, in the red this morning<\/strong>, with futures suggesting leading indexes in Europe and on Wall Street are going to follow suit later today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Emerging-market currencies poised for selloff amid possible US yield spike? Developing-nation currencies may suffer losses amid a possible sharp rise in US real yields as inflation rises and the mitigating effects of China's economic rebound fade, according to Bloomberg. Emerging-market currencies saw their biggest losses since July 9 as the two-year yield jumped last week, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7210],"tags":[1042,394,344,115,72,382,119,122,3555],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-558548","post","type-post","status-publish","format-standard","hentry","category-planet-finance","tag-acwa-power","tag-aramco","tag-cryptocurrency","tag-emerging-markets","tag-enterpriseam","tag-ethiopia","tag-financial-markets","tag-planet-finance","tag-us-yields","wpautop","entry"],"acf":{"mongo_id":"239eaa86-ff10-4894-a143-f8cd0c5807a4","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[558529],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Emerging-market currencies could see a selloff if US yield spike continues - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/08\/16\/emerging-market-currencies-could-see-a-selloff-if-us-yield-spike-continues\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Emerging-market currencies could see a selloff if US yield spike continues\" \/>\n<meta property=\"og:description\" content=\"Emerging-market currencies poised for selloff amid possible US yield spike? Developing-nation currencies may suffer losses amid a possible sharp rise in US real yields as inflation rises and the mitigating effects of China&#039;s economic rebound fade, according to Bloomberg. 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Developing-nation currencies may suffer losses amid a possible sharp rise in US real yields as inflation rises and the mitigating effects of China's economic rebound fade, according to Bloomberg. 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The MSCI Emerging Markets Currency Index dropped over 4% since the beginning\u2026","rel":"","context":"In &quot;PLANET FINANCE&quot;","block_context":{"text":"PLANET FINANCE","link":"https:\/\/enterpriseam.com\/egypt\/planet-finance\/\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":559338,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/01\/18\/what-the-markets-are-doing-on-18-january-2021\/","url_meta":{"origin":558548,"position":1},"title":"What the markets are doing on 18 January 2021","author":"enterpriseam admin","date":"18 January 2021","format":false,"excerpt":"EM currencies under pressure as greenback enjoys Biden bounce: Emerging-market currencies are coming under pressure as incoming US president Joe Biden\u2019s pledge to pass USD 1.9 tn in fresh stimulus sends the USD on a two-week tear, Bloomberg says. 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