EMERGING MARKETS-Assets ease on profit-taking, weak US data
* Emerging markets ease after U.S. presidential election
* Weak U.S. economic data pressures markets
* Turkey assets fall on lack of IMF deal
NEW YORK, Nov 5 (Reuters) - Emerging market assets eased on Wednesday, a day after Barak Obama won the U.S. presidency, as investors took profits and shifted focus to the ongoing global credit crisis.
Post U.S. election elation briefly pushed emerging market equities to three-week highs before quickly dissipating and emerging debt spreads widened and currencies fell against the dollar.
A report showed U.S. private employers cut a larger-than-expected 157,000 jobs in October, the highest since November 2002, and suggested the U.S. government's closely watched non-farm payrolls report on Friday will likely show a loss of 200,000 jobs, analysts said.
"From the euphoria you have to shift back into economic focus. Non-farm payrolls could be the (downward) trigger so you will have to be cautious," Enrique Alvarez, head of Latin American debt strategy at IDEAglobal.
Data that the vast U.S. services sector shrank more sharply than expected in October also pressured the U.S. stock market.
The MSCI Latin American stock index .MILA00000PUS fell 3.7 percent in tandem with the Dow Jones Industrial Average index .DJI which fell almost 3 percent by midday in New York.
Emerging debt spreads, which measure the additional yield developing countries have to pay to raise money abroad, widened 26 basis points over U.S. Treasuries to 590 basis points, according to JP Morgan's Emerging Markets Bond Index Plus (EMBI+) 11EMJ.JPMEMBIPLUS.
Regional stock markets dropped as well, with Brazil's Bovespa index .BVSP falling 3.86 percent, Mexico's IPC index .MXX shedding 2.75 percent, Argentina's MerVal index .MERV dropping 1.27 percent, and Colombia's IGBC stock index .IGBC losing 2.3 percent.
Brazil reported on Wednesday it experienced $4.64 billion in net outflows in October, reversing inflows of the previous two months after investors sharply reduced holdings of domestic securities as the global financial crisis deepened. It also showed banks were more bearish on the Brazilian currency, the real. For details see [ID:nN05254004]
The real (BRBY) weakened 0.6 percent to 2.124 per dollar in volatile trade as the U.S. currency firmed against a basket of major global currencies.
The peso MXN=MEX01 weakened 1.25 percent to 12.700 per dollar after the report showing the U.S. service sector, which represents about 80 percent of the country's economic activity, had contracted in October.
TURKEY'S RETREAT
Turkish markets weakened following the government's hesitation to sign an IMF deal. Local markets had rallied the previous day on expectations the Turkish authorities had reached a deal with the Fund.
Prime Minister Tayyip Erdogan has said the government does not want to sign a new loan accord if the program exerted excessive constraints on Turkish economic policy.
Turkey's business community has been calling for another loan deal to help limit fallout from the current global economic crisis.
Lira assets might benefit in the coming days if investor sentiment towards emerging market continues to become more positive given Turkey offers one of the highest interest rates in the world, a foreign exchange dealer said.
Five-year Turkish credit default swap spreads widened to a mid-price of 387 basis points, widening 41 basis points, according to data provider Markit. That means it costs $41,000 more to insure $10 million worth of Turkish bonds versus Tuesday. (Editing by Tom Hals)
