(Bloomberg) -- Emerging-market assets rose last week as optimism over the reopening of economies in Europe and the U.S. outweighed rising U.S.-China tensions. Stocks even edged higher on Friday after Chinese lawmakers approved a proposal for new national security legislation in Hong Kong and President Donald Trump intensified his confrontation with the Asian nation. Argentina published a new debt offer that shortens its payment delay, while central banks in South Korea, Poland and Colombia all cut interest rates.
The following is a roundup of emerging-market news and highlights for the week through May 31:
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Highlights:
Chinese lawmakers approved a proposal for sweeping new national security legislation in Hong Kong that democracy advocates say will curb essential freedoms in the city
- In response, the U.S. said it could no longer certify Hong Kong’s political autonomy from China and Trump intensified his confrontation by moving toward revoking the territory’s special trade status under U.S. law, while ratcheting up verbal attacks on China
- Argentina’s ninth default on its external debt became official after some of its bonds were cut to default status by two rating companies; the CDS Determinations Committee was asked to rule on whether a “failure to pay” credit event occurred
- Brazil has more cases than any country except the U.S., while Mexico had its largest single increase in cases and fatalities; Brazil overtook Spain and now ranks fifth in the world in number of coronavirus deaths
- President Donald Trump blocked some travel from Brazil
Asia:
- People’s Bank of China Governor Yi Gang said the central bank will focus on five measures to support credit provision to the real economy
- President Xi Jinping’s government is throwing the might of the Chinese state behind the country’s vaccine developers
- The offshore yuan steadied near a record low
- A gauge of China’s manufacturing activity slipped in May, underlining the slow pace of recovery from the first-quarter slump
India announced a phased lifting of the nationwide lockdown by allowing malls, restaurants and places of worship to open from June 8
- India’s economy was pushed into a state of dormancy in April; its key services industries have come to a standstill during the coronavirus outbreak
- Economic growth slowed to 3.1% in the first quarter, just as the government began lockdowns
- Country moved additional troops along its northern border as it prepares for an extended conflict with China after several rounds of talks failed to ease tensions
- Nation’s coronavirus death toll has topped China’s
- Prosecutors have summoned Samsung Electronics Co. Vice Chairman Jay Y. Lee for questioning in an ongoing investigation
- South Korea reported its biggest spike in new coronavirus cases in nearly two months, raising fears of a second wave of infections
- Bank Indonesia sees the rupiah continuing to strengthen, while inflows into government bonds are also picking up
- Foreign investors were behind the outperformance of Indonesian bonds in May
- The Philippine central bank is currently revisiting the revised balance of payments forecasts for 2020, which include the latest FDI estimates
- The World Bank has approved a $500m loan to the Philippines to help mitigate the impact of the Covid-19 pandemic
- Philippine banks will play a crucial role in the country’s recovery process and lawmakers shouldn’t weaken them, central bank Governor Benjamin Diokno said
- The Thai Cabinet approved a plan for 39.4b baht in cash handouts to 13 million people
- Thailand will prepare for a lockdown exit, with the state of emergency due to end in June
- Thailand posted its first current-account deficit since May 2019
EMEA:
Russia is beginning to boost government spending significantly to fund the fight against the crisis. This will lead to a meaningful increase in ruble bond issuance, Deputy Finance Minister Alexei Moiseev said
- Moscow is to ease a lockdown as the number of new infections continues to slow
- Russia’s retail sales plunged the most since records began
- Russia’s Health Ministry granted a temporary registration certificate to the country’s first Covid-19 medicine, a generic version of the Japanese flu drug Avigan
- The Turkish central bank boosted its short-term borrowing of hard currency from local lenders to a record as it looked to boost international reserves after an effort to defend the lira
- South African business leaders lauded the government’s plan to substantially ease a nationwide lockdown that’s crippled the economy, even as the number of the coronavirus cases grows
- Trade balance unexpectedly swung to a record deficit from a record surplus in April
Latin America:
- Two Latin American airlines have filed for bankruptcy and investors are already casting doubt on some of the largest remaining carriers
- Argentina may have to dole out at least $880 million in subsidies this year to keep its state airline afloat, further weighing on government finances
- Brazil’s stocks and currency rallied after a video of a cabinet meeting that was cited as evidence that President Jair Bolsonaro tried to interfere with the federal police failed to shed new light on the allegations
- Politics were still in focus as the federal police targeted Bolsonaro allies as part of an investigation mandated by the Supreme Court into the spread of fake news; Rio de Janeiro Governor was targeted by another investigation into misuse of funds to fight the pandemic
- Bolsonaro vetoed exceptions to a salary freeze for public servants as requested by Economy Minister Paulo Guedes
- GDP fell 1.5% in the first quarter from the previous three-month period, the biggest quarterly tumble in nearly five years
- Consumer prices fell for the second month, fueling bets on another rate cut; the unemployment rate rose for the fourth month, while the fiscal deficit is expected to climb to a record in April, May and June
- Sao Paulo will allow some businesses to resume activities after the state government announced guidelines for cities to reopen
Argentina’s Exchange bondholder group said it was confident that its joint debt proposal with the Ad Hoc Argentine bondholder group provided a sound basis for a collaborative solution to the debt talks
- Central bank announced new restrictions for companies seeking access to the foreign-exchange market, but later said it intends to ease currency restrictions if the government reaches an agreement with creditors that is well received by markets
- Buenos Aires province extended the period for bondholders to accept its offer to exchange bonds through June 5
- Argentina’s primary deficit surged in April due to fiscal stimulus
- GDP contracted a little less than estimated in the first quarter and the country posted a surprise trade deficit in April
- State-owned utility CFE doubled down on demands for regulators to protect its market share
- The Mexican peso recorded its best month in a quarter century as investors started to look beyond the global lockdown
- Unemployment rate rose to the highest in a decade and retail sales slumped by almost a third in April
- The International Monetary Fund approved an $11 billion credit line for Peru
- Central bank governor said interest rates may be cut further, but at a gradual pace
- Jobless rate surged even more than expected in April amid deepest economic crisis in more than a century
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