China yields inch up as PBOC hints at bond sales; Romania rate decision ahead
Updated at 0850 GMT
Israel sends delegation to negotiate hostage release with Hamas
Poland's inflation to peak in Q1 2025, c.bank says
Korean shares end near over 2 yr high on Samsung boost
Stocks up 0.1%, currencies flat
By Johann M Cherian
July 5 (Reuters) -Most emerging markets stocks and currencies were muted on Friday ahead of a key U.S jobs report, while investors assessed the possibilities of large-scale bond sales by China's central bank and awaited an interest rate decision out of Romania.
Yields on Chinese bonds CN5YT=RR, CN10YT=RR, CN30YT=RR inched up about 2 to 4 basis points after the People's Bank of China (PBOC) said it had hundreds of billions of yuan worth of bonds, and would sell them depending on market conditions as part of a plan markets see as an effort to cool a bond rally.
Given wider economic issues in the world's second-largest economy, traders have turned to safe-haven bonds, sending yields to record lows, with the yield on China's 10-year bond standing at 2.2%, compared with 4.3% on the U.S. benchmark US10YT=RR.
"We think the forces pushing down long-term yields are mostly structural and doubt that they will reverse any time soon," said Julian Evans-Pritchard, head of China economics at Capital Economics. "The best that the PBOC can probably hope to achieve is to stabilize yields around current levels for a few quarters, but not indefinitely," he said.
MSCI indexes tracking equities in developing economies .MSCIEF inched up 0.1% and were set for a weekly rise of 1.8%.
Korea's tech-heavy index .KS11 rose 1.3% to hit a nearly 30-month high, bumped up by Samsung Electronics 005930.KS 3% jump after the phone maker estimated a more than 15-fold rise in its second-quarter operating profit.
A key U.S. employment report will top the day's agenda later on as it could influence the outlook for the dollar and the Federal Reserve's interest rate path.
Most emerging market currencies have been under pressure this year, with their gauge .MIEM00000CUS so far down nearly 1%, as their central banks have kicked off monetary policy easing cycles while the U.S. Fed is holding off with cutting its rates.
In central and eastern Europe, Romania's leu EURRON= was muted against the euro ahead of its central bank's decision, with economists expecting a 25 basis-point cut in the benchmark rate to 6.75%.
Poland's zloty EURPLN= edged up 0.1%, after its central bank, which held rates steady earlier this week, said inflation was expected to peak in the first quarter of 2025.
Markets also watched developments in the Middle East, where according to sources Israeli Prime Minister Benjamin Netanyahu decided to send a delegation to resume stalled negotiations on a hostage release deal with Hamas.
The shekel ILS= strengthened 0.6% and Tel Aviv stocks .TA125 advanced over 1.5%, while crude prices were flat, with Brent futures LCOc1 nearing $90 per barrel.
For TOP NEWS across emerging markets nTOPEMRG
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
For GRAPHIC on emerging market FX performance in 2024 http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2024 https://tmsnrt.rs/2OusNdX
Reporting by Johann M Cherian in Bengaluru
Editing by Tomasz Janowski
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