* Rising oil prices buoy Russia’s rouble
* Turkish lira at six-month high
* South African shares at new highs
* Markets in China, Hong Kong, Taiwan closed for holiday
Feb 15 (Reuters) – Russia’s rouble rose to a one-month high on Monday as oil prices gained, while an index of developing-market stocks scaled record highs on hopes of a stimulus-fuelled global economic recovery.
The rouble rose 0.7% against the dollar as crude prices reached 13-month highs on fears of heightened tensions in the Middle East.
Risk premiums evaporate quickly, so the Middle East tensions should have a short-lived impact on prices, said Hussein Sayed, chief market strategist at FXTM.
But “the robust recovery in oil prices and industrial metals over the past couple of months is driving the idea of a new commodities supercycle in which prices remain above-trend for many years to come,” he said, which signals an upbeat outlook for crude exporter Russia’s currency.
The rouble was set to repeat last April’s advance and mark its ninth straight session of gains.
On Friday, growing prospects of new European Union sanctions against Russia limited gains in the currency, even though the central bank left interest rates unchanged and hinted at a tighter policy.
Turkey’s lira touched six-month highs after J.P. Morgan raised its expectations for Turkish economic growth to 4.6% this year, from 3.3% previously. It also increased its 2020 view, based on strong private-sector performance through the coronavirus pandemic.
JPM’s Turkey bond index has been outperforming most major peers as well as JPM’s broader EM bonds index since early last year.
The currency has gained about 4% this month – its fourth straight month in the black, on expectations of tight monetary policy. This week, the central bank is expected to keep its policy rate unchanged at 17%, after raising it by 675 basis points since November under new Governor Naci Agbal.
South Africa’s rand hit peaks not seen in more than a year, while in central Europe the Polish zloty gained against a stronger euro as some COVID-19 restrictions in the country were eased over the weekend.
An upbeat handover from Asia saw MSCI’s index of emerging market shares surge to record highs. Energy shares boosted Russia’s MOEX, while South Africa’s blue-chips index climbed new highs.
Unprecedented amounts of stimulus since the pandemic began have spurred bets of a global economic recovery, with U.S. President Joe Biden’s progress in passing a $1.9 trillion aid package further renewing interest in riskier emerging- market assets.
In Ukraine, the International Monetary Fund ended a review of its $5 billion loan program with the country without clearing the next tranche because conditions haven’t been met. Yields on some short-term bonds declined. For GRAPHIC on emerging market FX performance 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, see tmsnrt.rs/2OusNdX
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