EMERGING MARKETS-FX, stocks steady as investors await US trade updates, tax reform bill

By Ragini Mathur and Purvi Agarwal

July 2 (Reuters) - Most emerging market stocks and currencies steadied on Wednesday as investors monitored global trade developments ahead of the United States' planned re-imposition of its tariffs on July 9.

U.S. President Donald Trump said he was not considering extending the deadline for countries to negotiate trade deals with the U.S. and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India.

Investors were trying to gauge the ramifications of Trump's tariffs, that have threatened to upend global supply chains, if countries were unable to negotiate a deal before the deadline.

"Trade headlines resulted in some market volatility with Trump suggesting that he would not extend the deadline ... if confirmed, it would be a slight negative as the market has come to view the deadline as bit of a non event," Mohit Kumar, chief Europe economist at Jefferies.

Kumar also pointed out that positioning in risky assets was not as supportive as before, so they would see a slow move upwards rather than a massive rally.

Markets are also monitoring Trump's "big, beautiful bill", that narrowly passed the Senate and was headed to the House of Representatives. If passed, it is expected to add a whopping $3.3 trillion to the country's fiscal debt.

The dollar index =USD was slightly higher on the day, after logging nine consecutive sessions of declines, its longest losing streak since 2008.

MSCI's index tracking global EM currencies .MIEM00000CUS was little changed.

Most emerging European currencies were subdued against the euro, but the Hungarian forint EURHUF= fell 0.3%, underperforming peers.

Poland's currency EURPLN= was slightly lower ahead of the country's central bank's policy decision.

"There will be a hawkish tone again, which should support the currency given some speculation of a rate cut for today's meeting, given the weaker inflation numbers and the government's decision to freeze household electricity prices until the end of the year," said analysts at ING.

In the Middle East, Israeli stocks .TA125 gained 0.4% to another record high. Trump urged Iran-backed Hamas militants on Tuesday to agree to what he called a "final proposal" for a 60-day ceasefire with Israel in Gaza.

Israel's shekel ILS= dipped 0.1%, while Turkey's lira TRYTOM=D3 was flat against the greenback.

South Africa's rand ZAR= depreciated 0.6% after three sessions of gains, while the stock index .JTOPI was 0.5% lower ahead of the release of a domestic inflation expectations survey.

MSCI's global EM stocks gauge .MSCIEF was down 0.1%. Regional stocks in Europe were broadly higher with ones in Hungary .BUX up 0.1%.

Elsewhere in EMs, the International Monetary Fund said on Tuesday that it has completed its fourth review under the funds 48-month Extended Fund Facility Arrangement for Sri Lanka, allowing the country to draw about $350 million.

Dollar bonds in the country were broadly higher, with the one maturing in 2033 XS2966241445=TE up close to one cent to the dollar.

HIGHLIGHTS:

** South Korea June inflation beats forecasts

** India's new light touch on FX volatility spurs hedging ramp-up

** Thai monetary policy must stay flexible as headwinds build, central bank deputy says

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