Stocks rise as markets eye China stimulus plans and interest rate decisions

Kenya bonds fall after IMF says lending program review abandoned

South Africa central bank rate decision on Thursday

US Fed’s interest rate decision on Wednesday

S&P upgrades Saudi Arabia’s credit rating to A from A

EM stocks up 0.7%, FX flat

March 17 – Emerging markets stocks climbed on Monday as investors assessed plans from the Chinese government to boost domestic consumption ahead of a plethora of interest rate verdicts this week, including the U.S. Federal Reserve.

Stocks in South Korea and Hong Kong closed up after China’s State Council on Sunday unveiled what it called a “special action plan” to boost domestic consumption.

Mainland Chinese investors, however, were less enthusiastic, with the blue-chip CSI300 closing 0.2% down.

MSCI’s broad gauge for EM stocks advanced 0.7% by 0856 GMT.

Front and centre for the week ahead will be the Fed’s interest rate decision on Wednesday, with markets widely expecting the central bank to hold its rate steady.

“The extreme uncertainty triggered by the first moves of the new U.S. administration poses downside risks for employment and upside risks for inflation in an economy that still shows healthy domestic demand and sticky inflation,” Paolo Zanghieri, senior economist at Generali Investments, said.

“This uncertainty should reinforce the data-driven approach the FOMC has long advocated.”

Jitters around the ever-changing U.S. trade policy has rattled markets, with the dollar dipping against most developed market peers. Emerging markets have cashed in somewhat on the greenback’s weakness

MSCI’s index for EM currencies has advanced 1.7% so far this year compared with a more than 4% fall of the dollar index in the year-to-date.

EM stocks meanwhile, have outperformed the U.S. S&P 500 so far in March, as beaten down Indian equities have recouped some of their losses and Beijing vowing more support for its ailing economy helped Chinese equities recover.

Central Eastern Europe was not far behind, as hopes of a peace deal between Russia and Ukraine lifted sentiment, in contrast to a sharp drop in American equities, where the S&P 500 slipped into a technical correction last week.

U.S. President Donald Trump said he plans to speak to Russian President Vladimir Putin on Tuesday and discuss ending the war in Ukraine, after talks between U.S. and Russian officials in Moscow.

CEE equities were broadly higher, with Polish blue chips advancing 0.4%, while most currencies held steady against the euro.

Last week, data showed Hungary’s headline inflation rose to 5.6% in February, amongst the worst in Europe, which prompted Prime Minister Viktor Orban to announce that the government would curb the prices of 30 basic foodstuffs from the middle of March.

In Africa, Kenya’s international bonds tumbled more than 1 cent on the dollar after the International Monetary Fund said both sides had abandoned the ninth review of its current lending program.

South Africa’s rand meanwhile, weakened 0.1% against the dollar in lead-up to an interest rate decision on Thursday, when the South African Reserve Bank is widely expected to hold its rate steady at 7.50%.

Interest rate decision in Brazil, Chile and Russia are also due later in the week.

Late on Friday, global ratings agency S&P raised Saudi Arabia’s rating to A from A, with a stable outlook, underpinned by the ongoing social and economic transformation in the country.

** China retail sales pick up as Beijing turns to consumers to ease US trade pressure

** Bessent says there are ‘no guarantees’ there will not be a US recession

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