| July 31
July 31 Argentina's longer-term debt insurance
costs fell while shorter-term costs rose on Thursday, suggesting
investors expect a deal in the medium term after the country
defaulted for the second time in 12 years.
Broader emerging stocks dropped after the U.S. Federal
Reserve sounded more hawkish on interest rates.
After a long legal battle with hedge funds that rejected
Argentina's debt restructuring following its 2002 default, Latin
America's third-biggest economy failed to strike a deal in time
to meet a midnight deadline for a coupon payment on exchange
This sent Argentina into default, but investors thought the
country could still strike a deal.
"It's probably going to be more of a soft default scenario
where prices will slide a bit. There is confidence in what the
government is going to do," said Rune Hejarskov, senior
portfolio manager at Jyske Invest, which holds Argentinian
Argentina's 5-year credit default swaps (CDS) fell more than
400 basis points to 1,444 bps, according to Markit. Its 1-year
CDS, however, rose 21 bps from Wednesday's close to 4,708 bps,
indicating markets are betting on a higher probability of
Argentina's bonds were not being actively traded in London
trading hours, market participants said, adding there was little
contagion to other emerging markets.
The MSCI emerging stocks index fell 0.7 percent to
a nine-day low after the Federal Reserve's policy meeting.
U.S. investors tend to sell high-yielding emerging market
assets when they expect interest rates to rise at home.
China shares , however, finished their best
month since 2012.
Reacting to the Fed statement and forecast-beating GDP data
from the United States, the South African rand fell to a 1-1/2
week low before trade numbers at 1200 GMT.
Russian stocks and the rouble rose after the European
Commission published a new list of those subject to sanctions
over Ukraine that spared major listed companies.
Moscow's dollar-denominated RTS index was up 0.65
percent, and its rouble-traded MICEX rose half a percent,
after steep losses before the sanction details were announced.
The Czech crown firmed a shade to 27.542 against
the euro before the central bank's policy meeting later on
The central bank said on Tuesday it would move its cap on
the crown exchange rate to a weaker level only if it saw a
significant increase in deflation risks, reiterating its earlier
position after trade unions opposed any further currency
Turkish stocks fell and the lira dipped as
markets reopened after a three-day holiday.
For GRAPHIC on emerging market FX performance 2014, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2014, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2014, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2014, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
(Additional reporting by Andrew Winterbottom; Editing by Ruth