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EM stocks up 1.35%, FX up 0.16%

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S&P affirms Poland's outlook at 'stable'

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US exempts Hungary from Russia sanctions after Trump-Orban

meet

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Hungary secures financial shield agreement with

WashingtonCzech

jobless rate edges slightly up in October

By Nikhil Sharma

Nov 10 (Reuters) - Emerging Market stocks rallied on

Monday, mirroring global equities, on optimism that the

prolonged U.S. government shutdown may soon end, ahead of key

inflation data releases across the region throughout the week.

MSCI's index for Emerging Market equities climbed

1.35%, kicking off the week on a stronger note after

considerable losses in the previous week.

Global sentiment improved after the U.S. Senate on Sunday

advanced a measure aimed at reopening the federal government and

funding it through January, ending a shutdown that has sidelined

federal workers, delayed food aid and snarled air travel.

"There are still more hoops to jump through before the 1.4

million federal workers get their jobs back, but this first step

towards ending the shutdown has received a warm reception from

financial markets," Kathleen Brooks, research director at XTB,

said in a note.

Equities in Asia surged, while futures tracking Wall

Street's main stock indexes moved sharply higher to indicate

bigger moves at open.

A broader gauge tracking EM currencies rose

0.16% after declining about 0.4% in the previous week. A softer

dollar on the possible end to the shutdown helped boost

currencies elsewhere.

In Poland, the currency zloty was largely steady,

while Warsaw's benchmark index jumped 1.55% to an

all-time high.

The moves came after ratings agency S&P affirmed Poland's

outlook at "stable" on Friday, noting strong medium-term growth

prospects even as debt risks rise. In contrast, Fitch and

Moody's have revised Poland's outlook to "negative".

Investors will look ahead to the week's key data, including

October inflation numbers and third-quarter GDP figures, to

evaluate the health of the economy amid fiscal uncertainties.

A slowdown in inflation and an improvement in its outlook

had prompted the National Bank of Poland last week to extend its

policy easing cycle by slashing rates by another 25 basis points

to 4.25%.

The Hungarian forint rose 0.46% to a fresh

1-1/2-year high as investors welcomed Washington's temporary

exemption for Hungary from U.S. sanctions on the use of Russian

oil and gas, marking a win for Prime Minister Viktor Orban after

his friendly meeting with President Donald Trump.

Budapest stocks jumped 1% to a record high on Monday.

Orban termed the agreement a "financial shield" and has

committed to buying U.S. liquefied natural gas with contracts

valued at some $600 million.

On the data front, investors will assess Hungary's inflation

figures on Tuesday, a potentially decisive gauge of the central

bank's policy decision next week.

In the Czech Republic, the October CPI data will also be in

focus on Tuesday, given that the central bank has flagged upside

price risks from wage growth and potential government spending,

which forced it to keep interest rates on hold last week.

The Czech koruna was down 0.1%, while Prague's

main stock index rose 0.63% to hit an all-time high. Fresh

data showed the unemployment rate rose more than expected to

4.6% last month.

Elsewhere in EM, S&P Global revised Israel's outlook to

"stable" from "negative" on Friday, citing reduced probability

of security risks after an October ceasefire agreement with

Hamas.

Additionally, the ratings agency also raised Ghana's rating

to "B-/B" from "CCC+/C", crediting the country's strengthening

balance of payments and fiscal positions. Ghana's dollar bonds

edged up on Monday.

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