World shares tumbled towards their worst month in almost two years on Friday as turbulence engulfed emerging markets.
European and U.S. markets were unable to fight the flow with Europe's main stock indexes suffering another torrid day and Wall Street opening down 1 percent on course for a second successive week of falls.
U.S. Economic sentiment data was due later after a flurry of employment benefits and inflation figures, but it was the resumption of intense selling of vulnerable emerging markets that remained the focus.
The Russian rouble and the Turkish liracame under renewed pressure in the currency markets [EMRG/FRX], while government borrowing costs jumped across the board despite local policymakers' efforts to staunch the bleeding.
Signs also grew that the stresses were increasingly spreading to central European countries such as Poland and Hungary, which have fared relatively well in the first phase of the sell-off.
Poland delayed publication of its monthly debt supply plan until next week due to market turbulence and an overhaul of its pension scheme, a day after Hungary scrapped a bond sale.
"We are in a negative feedback loop of weak currencies, higher interest rates, weak growth and capital outflows," said David Hauner, head of EEMEA fixed income strategy and economics at Bank of America Merrill Lynch.
"This feedback loop needs to play out and that means at the end of the day EM assets need to become much cheaper. Only then will people come back to buy."
Source: Reuters
European and U.S. markets were unable to fight the flow with Europe's main stock indexes suffering another torrid day and Wall Street opening down 1 percent on course for a second successive week of falls.
U.S. Economic sentiment data was due later after a flurry of employment benefits and inflation figures
The Russian rouble and the Turkish lira
Signs also grew that the stresses were increasingly spreading to central European countries such as Poland and Hungary, which have fared relatively well in the first phase of the sell-off.
Poland delayed publication of its monthly debt supply plan until next week due to market turbulence and an overhaul of its pension scheme, a day after Hungary scrapped a bond sale.
"We are in a negative feedback loop of weak currencies, higher interest rates, weak growth and capital outflows," said David Hauner, head of EEMEA fixed income strategy and economics at Bank of America Merrill Lynch.
"This feedback loop needs to play out and that means at the end of the day EM assets need to become much cheaper. Only then will people come back to buy."
