(Bloomberg) -- Emerging-market stocks fell for a fourth week after Federal Reserve minutes suggested further tightening and U.S. President Donald Trump threatened to escalate his trade fight with China. Developing-nation currencies and local-currency bonds rose.

Highlights for the week ended Oct. 19:

• A majority of Fed officials favor an eventual and temporary move for interest rates to above the level they deem neutral for the economy in the long run, according to the minutes of the Sept 25-26 policy meeting
• Trump threatened to impose another round of tariffs on China and warned that Chinese meddling in U.S. politics is a “bigger problem” than Russian involvement in the 2016 election
• The U.S. Treasury Department stopped short of declaring China a currency manipulator in its semi-annual report on exchange rates, averting an escalation in the trade war, while serving notice that the U.S. will closely watch the yuan after its recent slide. No major trade partner was designated a manipulator
• The Turkish lira was the biggest EM gainer for a second week amid expectations Turkey and the U.S. will patch up their diplomatic spat
  • U.S. Secretary of State Michael Pompeo signaled that some sanctions imposed on Turkey over the detention of pastor Andrew Brunson could be eased now that the American has been freed
• Trump said his administration is “waiting for the results of about three different investigations” as it decides how to respond amid reports that the U.S.-based journalist Jamal Khashoggi was ambushed inside the Saudi consulate in Istanbul, then tortured, killed and dismembered. He warned of “very severe” consequences for the killing

Asia:

• The Shanghai Composite Index fell to the lowest since Nov. 2014 amid worries over trade conflicts with the U.S. and slowing growth; the offshore Chinese yuan extended a 4-week losing streak
  • China’s gross domestic product increased 6.5 percent in the third quarter from a year earlier, compared with the median estimate of 6.6 percent in a Bloomberg survey and down from 6.7 percent in the previous quarter
  • The nation’s top financial officials assured investors that they’re able to keep financial risks under control
• The South Korean won was little changed on the week; Bank of Korea left its key interest rate unchanged at 1.5 percent, citing an escalating U.S.-China trade war as among rising risks to Asia’s fourth-largest economy. It trimmed growth forecasts for this year and next
• Indonesia’s rupiah halted a 4-week losing streak as the nation’s central bank sees the currency averaging 14,800-15,200/USD in 2019, Governor Perry Warjiyo said at a parliamentary hearing; that compares with previous estimate of 14,300 to 14,700
• The Malaysian ringgit fell for a 4th week; central bank Governor Nor Shamsiah Mohd Yunus said Asian countries "should be allowed to use capital flow regimen policies as a legitimate policy tool that can be deployed in a pre-emptive manner to deal with potential risk to financial market stability," the Financial Times reported
  • Malaysian GDP growth will average 4.5 percent to 5.5 percent in 2018 through 2020, compared with an earlier target of 5 percent to 6 percent, Prime Minister Mahathir Mohamad said in review of 11th Malaysia Plan
• India’s rupee strengthened for a second week; Prime Minister Narendra Modi has sought a review of payments terms with major international oil producers in order to provide temporary relief to the currency, according to statement issued by the prime minister’s office
• The Philippine peso led gains among Asian currencies; central bank may pause its rate-hiking cycle next month if inflation eases, said Monetary Board member Felipe Medalla

EMEA:

• A list of luminaries shunning a Saudi Arabian investment conference expanded due to reports that journalist and government critic Khashoggi had been tortured and killed by Saudi agents in the country’s consulate in Istanbul. Goldman Sachs Group Inc. and U.S. Treasury Secretary Steven Mnuchin canceled apperances
• Turkey sold dollar-denominated bonds for the first time in six months, raising $2 billion, as turbulence that locked the Middle East’s biggest economy out of international capital markets eases; benchmark Borsa Istanbul 100 index declined
• Russia’s ruble extended gains for a second week, while 10-year bond yields fell; the U.S. Justice Department charged a Russian national for allegedly being one of the masterminds behind a conspiracy to interfere in both 2016 and 2018 elections
  • Russia is trimming its local fundraising in 2018 to 1.2 trillion rubles from 1.7 trillion rubles, and there are no plans to sell Eurobonds because investors are “nervous” about the country’s debt, Finance Minister Anton Siluanov said
  • Russia’s MOEX index dropped for a third week; Yandex, Russia’s largest internet company, tumbled after a newspaper report that state-run Sberbank is in talks to by a major stake because authorities see Yandex as excessively independent
• Hungary’s central bank left its policy rate unchanged despite faster-than-expected inflation after signaling last month that the end of stimulus was nearing
  • READ: World’s Steepest Curve Set to Fade as Hungary’s Doves Waver
• South Africa’s FTSE/JSE Africa All Shares Index slid a fourth week, weighed by miners Anglo American and BHP Billiton
  • The rand posted its second week of gains as foreign buyers returned to South Africa’s bond market and options traders pared back bearish bets on the currency
  • READ: South Africa Rates to Rise If CPI Forecasts Play Out, SARB Says

Latin America:

• Brazil’s real and Ibovespa both extended a 3-week winning streak; right-wing presidential candidate Jair Bolsonaro maintains formidable advantage over his rival in latest poll ahead of final round of the presidential election on Sunday, Oct 28
  • Central bank president Ilan Goldfajn is preparing to step down by year-end while Bolsonaro mulls several people as next BCB chief, according to people familiar with the matter
  • Goldfajn’s likely departure sparked concern among investors, although some held out hope that his replacement will be an ally of Paulo Guedes, Bolsonaro’s University of Chicago-educated economic adviser
• Mexico’s peso had its worst week in five months, weighed by a stronger U.S. dollar and threat from U.S. President Trump to shut the border if Mexico doesn’t stop Central American migrants from reaching the U.S.
  • The U.S. Treasury plans to triple the size of an emergency swap line for Mexico to $9 billion, giving the Latin American nation more of a rainy-day cushion as rising U.S. interest rates keep the pressure on emerging markets
• The Chilean peso extended a 3-week slump; the nation’s central bank raised borrowing costs for the first time since 2015 after economic growth rebounded more strongly than analysts had forecast and inflation accelerated
• Argentina’s peso strengthened for a 3rd week while the Merval stock index extended a 4-week losing streak; the country’s consumer prices rose 6.5 percent in September from August, while annual inflation reached 40.5 percent, the highest levels recorded since the national statistics institution overhauled its data publications at the start of 2017

Upcoming data:

--With assistance from Krystof Chamonikolas.

To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net;George Lei in New York at glei3@bloomberg.net;Alex Nicholson in Moscow at anicholson6@bloomberg.net

To contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Andrew Janes, Alec D.B. McCabe

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