EMFX enjoys Powell's dovish........>

EMERGING MARKETS: EMFX enjoys Powell's dovish tones

-Following the Fed's hints that it could tolerate future inflation overshoots as

'appropriate' policy helped keep the greenback under pressure late in the US

session, buoying EM markets and currencies generally. One of the main

beneficiaries was the ZAR, which outstripped most others as following recent

dire power-cut induced performance. Reports that the South African government

are acting to put an end to the Eskom load-shedding exercises also seemed to

help.

-The move higher in HKD had many European traders scratching their heads, with

most pinning the move in spot and forward points on regulatory cash/funding

requirements for HK banks headed into year-end. Either way, this may increase

the focus on HIBOR fixes headed into the Christmas break.

-The Turkish rate decision takes focus Thursday, with markets broadly expecting

a 150bps or so rate cut, but expectations sit in a wide range. The Philippine

rate decision is also due and Mexican industrial production is also due.