* Emerging markets lag U.S. equity rally
* Colombian peso drops over 1 percent versus U.S. dollar
* Debt markets edge higher in quiet trade.
By Daniel Bases
NEW YORK, Nov 5 (Reuters) - Emerging markets lagged the
advance made by their developed market peers on Thursday in
what some analysts say is a mixture of fatigue, profit taking
and trepidation ahead of the U.S. jobs report on Friday.
A drop in commodity prices also undermined the sector given
its high reliance on sales of raw materials, minerals, gas and
oil to fatten government coffers and corporate balance sheets.
MSCI's broad emerging market stock index rose just 0.51
percent .MSCIEF while in the United States the S&P 500 stock
index .SPX climbed 1.92 percent as data showing rising
business productivity and a drop in weekly jobless claims
boosted confidence the U.S. economy was recovering.
Latin American stock markets too rose, with the MSCI Latin
American stock index gaining 1.47 percent .MILA00000PUS.
"I think commodity prices were down. There also may be some
building concerns of more interventionist governments in
emerging markets and also some profit taking ahead of Friday's
(U.S.) payrolls data," said Paul Biszko, senior sovereign
analyst at RBC Capital Markets in Toronto, Canada.
"There is a lack of follow through here and that's a bit of
a concern that perhaps EM is getting toppish," he said.
The latest Reuters poll has U.S. non-farm payrolls dropping
by 175,000 and the unemployment rate rising 0.1 of a percentage
point to 9.9 percent. [ECI/US]
Currencies in Latin America were generally stronger against
the U.S. dollar even as the greenback made marginal advances
against its main trading partners.
Colombia's peso fell 1.24 percent to 1,980.55 against the
U.S. dollar COP=STFX, although analysts were unaware of any
specific news events driving the move.
The government has made it clear it wants to limit the
peso's advance against the dollar, which put its exporters at a
disadvantage in still fragile global economic conditions.
"I think there could be some fatigue among investors. Some
of these names have had a dramatic rally, but there has been
more volatility in the past week. The trade though is
definitely to be long emerging markets versus developed
markets," said Kathryn Rooney, senior emerging market
macroeconomic strategist at BullTick Capital Markets in Miami.
"I think Colombia is a different story though because the
capital controls are a real threat and in the short-term there
isn't much upside as guys are saying, look the central bank is
not going to let the currency appreciate too much for fear of
Dutch Disease or stifling growth.
Rooney said she did not believe the implementation of
capital controls in Colombia was imminent because it appears
the authorities first want to enact more market friendly
measures to counteract appreciation.
Peru's central bank is expected to leave interest rates
unchanged at 1.25 percent at its meeting on Friday while
markets in Argentina will be closed for a holiday.
(Reporting by Daniel Bases, Editing by Chizu Nomiyama)
