EMFX starting to look cautious.....>

EMERGING MARKETS: EMFX starting to look cautious ahead of the Fed

-TRY extended recent outperformance to come into (very) close proximity with the

200-dma against the greenback. USD/TRY has now dropped close to 3.5% from the

best levels of last week, with USD/TRY bears now eyeing key support at 5.5633.

-Elsewhere, IDR sat soft, underperformed broader Asia-Pac FX space as markets

eyed reports that further deposit corporations in the country (this time LPS)

are trimming their deposit rates as they eye easier CB policy.

-INR also sits lower ahead of the onshore close, with Indian equity markets

performing particularly poorly and pressing the NIFTY50 below the 200-dma. INR

still sits modestly higher against the USD on the week, however.

-SocGen warned overnight that EMFX will not rally further from a mere 25bps cut

from the Fed, which would prove neutral or even negative for EM space. Any 50bps

Fed cut may be knee jerk positive, but this should fade going forward.

-The EM calendar is light Tuesday, but South Africa's budget is due, which

should include an insight into the finances of beleaguered utility Eskom. ZAR is

already weaker ahead of the event.