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EM stocks up 0.37%, FX up 0.13%

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South African markets rally on lowered inflation target

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Poland's Q3 GDP at 3.7% y/y, in line with forecast

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Moody's Ratings affirms Panama's Baa3 ratings, maintains

negative outlook

By Nikhil Sharma

Nov 13 (Reuters) - Emerging market stocks extended gains

on Thursday after U.S. President Donald Trump signed legislation

ending the longest government shutdown in history, while South

African markets rallied on optimism over the budget review.

An index tracking emerging market stocks was on

track to extend gains to the fourth session, up 0.23%, echoing

strength across broader Asian equity markets.

A separate index for EM currencies was up

0.13%, with a softer dollar allowing currencies elsewhere to

shine.

Trump's signature on the bill on Wednesday will extend

federal government funding through January 30, bringing

furloughed workers back to their jobs and allowing the release

of delayed major economic data that had clouded the Federal

Reserve's interest rate policy outlook.

"It seems that investors are bracing for major U.S. data

releases to be on the soft side, which would strengthen the case

for the Fed to consider lowering interest rates at its last

meeting and, more importantly, to continue easing monetary

policy over this 12-month horizon," said Piotr Matys, senior FX

analyst at In Touch Capital Markets.

"And such prospects are obviously positive for emerging

markets."

Elsewhere, the South African rand jumped 0.5% to

near a three-year high against the dollar, lifted by continued

optimism following the previous day's budget review, in which

the government cut its inflation target to 3% - the first such

change in 25 years.

The Johannesburg Stock Exchange's Top-40 index

jumped 2.3% and government bonds also rallied. There was also

market speculation that S&P Global Ratings would upgrade South

Africa's sovereign rating at its scheduled review on Friday.

In Central-Eastern Europe, Hungarian bonds remained in focus

after Prime Minister Viktor Orban's cabinet hiked its budget

deficit forecast, prompting JPMorgan to downgrade government

bonds to "market weight" from "overweight" on Wednesday.

Hungary's 10-year bond yield has risen 21 basis

points in the previous two sessions. The currency forint

fell 0.32% on the day, having fallen about 0.4% this

week so far.

Budapest stocks rose 0.32%. Latest figures reveal

industrial output remained stable in September at 1.3%.

In Romania, the central bank held its benchmark rate at

6.50% on Wednesday, as expected, at its last meeting this year.

It cautioned that inflation would only return to target in the

first quarter of 2027, later than previously expected.

Bucharest stocks added 0.24% and the leu currency

was little changed. Fresh data show factory activity

returned to expansion in September, following a contraction the

month before.

The Polish zloty was flat, while Warsaw's

benchmark index jumped 0.62% after data showed the

economy expanded 3.7% year-on-year in the third quarter compared

to a 3.3% rise in the previous quarter.

The Czech koruna was steady, while Prague's main

stock index edged up 0.3% to trade at a record high. Data

showed the Czech current account showed a surplus of 29.36

billion crowns ($1.41 billion) in September, beating the

forecast.

The Czech Republic remains in the midst of a leadership

transition and will resubmit its 2026 state budget plan to a

newly elected parliament

Prime Minister-hopeful Andrej Babis has said the draft lacks

billions of euros needed for infrastructure projects and social

spending. Babis' election pledges of higher spending could

increase the country's fiscal deficit.

Elsewhere, Moody's Ratings on Wednesday affirmed Panama's

long-term credit ratings at Baa3 while maintaining its negative

outlook on the Central American nation, citing risks with its

fiscal consolidation process. The country's dollar bonds were

mixed.

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