Lack of trade progress and.........>

EMERGING MARKETS: Lack of trade progress and proximity to Fed dulls price action

-The US-China trade negotiations ended with what appeared to be little progress

this morning, although both sides agreed to hold future talks in order to chip

away at the current stalemate. This did little to stir EMFX markets, with the

proximity to today's critical FOMC decision also providing another incentive for

traders to sit on their hands.

-As such, recent trends have extended further still Wednesday, with TRY/ZAR now

clocking gains of over 6% from last week's lows. The cross got a decent boost

today from yesterday's close above the 2.5525 200-dma, with markets now setting

targets at the early June 2.6094.

-Asia-Pac markets were generally quiet, although the surprisingly poor Hong Kong

GDP (-0.3% vs. Exp. +0.9%) will raise concerns over the state of regional trade.

This contrasted with Taiwan GDP which firmly beat forecast.

-Brazil's central bank also hold their rate decision Wednesday and are seen

emulating the Fed with a 25bps cut to the SELIC rate to new all time lows of

6.25%.