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EMERGING MARKETS-EM assets hit pause ahead of Trump–Putin summit

ReutersAug 15, 2025 9:11 AM
  • EM stocks, FX flat
  • China's factory output, retail sales growth slump
  • Trump-Putin to meet in Alaska at 1900 GMT

By Pranav Kashyap

- Emerging market stocks and currencies were in limbo on Friday as investors pressed pause ahead of a summit between U.S. President Donald Trump and Russia's Vladimir Putin about the war in Ukraine.

A gauge tracking EM equities .MSCIEF held its ground at 1,271.2 points. However, the index was set to gain for a second straight week, largely driven by hopes of a breakthrough in the Trump-Putin talks and bets of a rate cut by the Federal Reserve next month.

The U.S. and Russian leaders meet in Alaska at 1900 GMT, with a potential ceasefire and a last-gasp nuclear offer on the table — stirring Kyiv and European fears of a sellout - especially with Ukrainian President Volodymyr Zelenskiy not invited to the summit.

Still, Trump hinted that if discussions with Putin went well, a meeting including Zelenskiy would follow through.

"While uncertainty around the outcome of the Trump-Putin meeting in Alaska is elevated, our bias is to expect a partial ceasefire. The second most likely option is simply to agree on another high-level meeting," said Nicolaie Alexandru-Chidesciuc, EM economic and policy research at J.P. Morgan.

"We continue to view the chances for a peace deal this year as insignificant, even a full ceasefire appears unlikely this year as Russia's core demands have not changed and they are incompatible with an independent Ukraine."

While the Russian rouble RUB= hit a more than one-week low against the dollar, Ukraine's international dollar bonds ticked up on the day.

Markets of bordering nations Poland and Romania were closed for a local holiday. On Thursday, stocks in Warsaw .WIG20 logged their biggest drop in two weeks, while Bucharest's equities .BETI closed 0.7% lower.

Romania faces a Fitch credit rating review later in the day, with markets watching for a potential slide to "junk" status. S&P in late July reaffirmed a BBB− rating — the lowest investment-grade rung — and kept a negative outlook.

Meanwhile, Asian stocks lost some steam after hotter U.S. producer prices data cooled hopes for a jumbo Fed cut. Investors still expect a quarter-point move next month, but CME FedWatch odds slipped to 92% from 99%.

Hong Kong's Hang Seng .HIS lost 1%, while Singaporean equities .STI dropped 0.9%.

China's factory output fell to an eight-month low in July and retail sales cooled sharply, piling pressure on Beijing to unleash more stimulus to revive demand.

The U.S. dollar =USD took a backseat, buoying a handful of Asian currencies.

Malaysia's economy grew roughly in line with expectations in the second quarter, data showed, though the central bank warned the outlook is clouded by uncertainty from U.S. tariffs. The ringgit MYR= dipped 0.1%, while equities in Kuala Lumpur .KLSE slipped 0.2%.

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

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