Eerie Calm Belies Emerging-Market Risk as Central Banks Decide

Months of concern over rising Covid-19 infection levels may be secondary for investors in coming days as market-moving events and policy decisions take center stage, Bloomberg News reported. China’s annual National People’s Congress starting Friday will likely keep volatility suppressed for developing-nation currencies, despite the prospect of another flareup in tensions between Beijing and Washington. JPMorgan Chase & Co.’s measure of implied volatility declined over the past three weeks as history suggests the People’s Bank of China will do what it can to ensure a calm yuan-trading environment during the meeting. Elsewhere, central banks in South Africa, Turkey, Indonesia and Thailand are forecast to cut interest rates again, potentially diminishing carry-trade returns from investments in their currencies. As distressed-debt levels rise across developing economies, Argentina may officially fall into default if the South American nation fails to reach a $65 billion restructuring deal with bondholders by Friday’s deadline. Read more