Emerging-market currencies rose Monday as investors follow diplomatic efforts from the US and its allies to contain the war in the Middle East.
(Bloomberg) — Emerging-market currencies rose Monday as investors follow diplomatic efforts from the US and its allies to contain the war in the Middle East.
Brazil’s real joined the rally in its peers at the open in the Americas as risk-on sentiment grew among investors. The gains come as US Secretary of State Antony Blinken steps up efforts to ensure humanitarian aid to people in Gaza and President Joe Biden considers a visit to Israel.
Israel’s benchmark equity index rose the most in two weeks and Egypt’s main gauge recaptured a record high. US officials are also intensifying their diplomatic efforts to warn Iran against entering the conflict, with many traders now betting the conflict won’t expand across the Middle East.
Read more: Blinken Returns to Tel Aviv in Bid to Contain War
Elections in Ecuador and Poland also helped boost assets. In Ecuador, the election of investor-favorite Daniel Noboa sent bonds rallying, with the notes due in 2035 jumping as much as 2.9 cents on the dollar to the highest in about a month.
Read more: Election of Pro-Business President Sends Ecuador Bonds Rallying
Meanwhile, Polish stocks, bonds and currency rallied after the pro-European-Union Civic Coalition neared victory in Sunday’s vote. Money managers including Goldman Sachs Group Inc. said the new government is likely to bring in prudent fiscal policies and lead the central bank to become more hawkish.
Read more: Poland’s Pro-EU Opposition to End Eight Years of Populist Rule
“The Civic Coalition promotes the return of a more EU-friendly stance and its victory would increase the prospect of an acceleration of the disbursement of European Union transfers to Poland,” Kevin Daly, a strategist at Goldman Sachs, wrote in a note. “We expect the central bank reaction function to now turn more hawkish.”
The broad emerging-market indexes posted losses amid concern over a US plan for sweeping measures to restrict China’s access to advanced semiconductors and chipmaking gear. Asian chip stocks fell, driving the MSCI Emerging Markets Index to a decline of as much as 0.8%.
Read more: US Will Tighten Curbs on China’s Access to Advanced Chip Tech
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.