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China's yuan recovers from four-month low

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Ghana feels pinch from low cocoa output; rate decision due

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Offshore investors sell South African stocks and bonds

By Ankika Biswas

March 25 (Reuters) - Emerging market assets were muted

on Monday, with investors gearing up for a key U.S. inflation

print and some regional central bank decisions this week, while

Senegal eurobonds fell as opposition candidate Bassirou Diomaye

Faye takes early presidential poll lead.

The MSCI index for EM stocks, which had made gains

last week on the back of the U.S. Federal Reserve's

reaffirmation of three rate cuts this year, slipped 0.2%, while

the currencies gauge edged up 0.1%.

Investors awaited the Fed's key inflation gauge - the

so-called core personal consumption expenditure (PCE) price

index - due on Friday, and any negative surprises on which could

put a dent in the expectations for early U.S. rate cuts.

China and Hong Kong stocks dropped on profit-taking in tech

and media shares, while the yuan rebounded from a four-month

low. Blue-chip CSI300 and Hang Seng indexes

fell 0.5% and 0.2%, respectively, while onshore yuan

climbed 0.3%.

South Africa's rand edged higher against the dollar

ahead of a policy decision on Wednesday. Data showed offshore

investors sold a net 1.89 billion rand ($99.51 million) of South

African stocks last week.

Senegal's international bonds fell as opposition candidate

Bassirou Diomaye Faye took the lead in early presidential

election results, with investors concerned this may spell a

rollback of business-friendly policies.

Ghana's cedi fell 0.6%, with eyes on a policy

decision later in the day. Central bank data showed the world's

number two cocoa producer's economy started to feel the pinch

from falling cocoa production, with low exports hurting trade

surplus and threatening the cedi.

Most Central and East European nations' currencies edged

against the euro, with Hungary's forint climbing 0.3%

ahead of a rate decision on Tuesday, expected to deliver a

75-basis-point cut.

Sri Lanka is expected to hold rates steady on Tuesday. The

rupee climbed 0.2%.

"Quite a few of EM central banks are in a position to cut,

and specifically in Asia, we've seen very little action, and

that's going to happen eventually as they're in a comfortable

position to potentially start to ease," said Michael Bolliger,

chief investment officer, emerging markets, UBS Global Wealth

Management.

"That can help people find catalysts to diversify into some

of these lagging markets."

Investors also awaited Turkey's local elections on March 31.

Its central bank stunned markets last week with a 500-bps rate

hike, seen by analysts as a signal that it was independent from

any political constraints.

HIGHLIGHTS:

** Asia private equity deals set for worst Q1 since 2015,

data shows