Emerging markets are heading towards the end of April with as many reasons to be optimistic as cautious.
While the high-riding dollar has exacerbated stresses in countries such as Argentina and Turkey, the prospect of an interest-rate cut this year by the Federal Reserve – a key cause of the US currency’s strength – is leaving some of the biggest investors more upbeat about the outlook in the developing nations.
Emerging-market currencies as measured by an MSCI Inc index had their worst week this year in the five days through April 26, putting them on course for a third month of declines, while gauges of stocks and bonds also retreated. Whether the selloff sets the tone for the next few months or turns out to be an aberration may rest largely on what signals the Fed gives about inflation in the world’s biggest economy when it concludes its two-day meeting on Wednesday.
“Dovish G-10 central banks and market nervousness into month-end appear to have triggered another wave of US dollar buying, which in the school of 2018 translates into emerging-market weakness, particularly in Argentina and Turkey,” said Anders Faergemann, a fund manager in London at PineBridge Investments, which oversees about $90bn.
“Altogether the global macro environment is still advocating a cruise-along scenario that should benefit risk assets such as emerging markets.” The Fed won’t have all the limelight. There’s another round of US-China trade negotiations this week. And in emerging markets themselves, investors will be waiting for Turkey’s central bank to clarify what’s happening to its net reserves. 
Argentina will also be on the radar amid concern about President Mauricio Macri chances of losing the October election to his populist predecessor Cristina Fernandez de Kirchner.
The focus will be back on the China-US trade discussions in a holiday-shortened week for the Asian country. Negotiators led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing as both sides work toward a draft agreement by next month Discussions will cover trade issues including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases, and enforcement, according to a White House statement.
“It’s time to consider taking some profits off the table especially as we get closer to the announcement of a deal,” Stefan Hofer, chief investment strategist in Hong Kong at LGT Bank AG, told Bloomberg TV’s Yvonne Man and Haslinda Amin. 
“Tactically, given the run that we’ve had, maybe now would be a good time to reassess”.
Investors will follow the central bank’s quarterly inflation briefing today in anticipation of getting an explanation of what’s happening to international reserves.
The central bank is due to shed light on billions of dollars of foreign-currency holdings that analysts have been struggling to keep track of this quarter, according to an official familiar with the regulator’s plans.
The lira fell to the lowest level since October last week as policy makers backed away from a pledge to tighten rates if needed, even as inflation hovers around four times the central bank’s target rate.
Argentina is set to release data today showing economic growth recovered in February, but any relief may be overshadowed by expectations that activity sank again in March.
The peso lost almost 9% of its value versus the dollar last week as investors reassessed whether market-friendly President Mauricio Macri can win re-election.
Brazilian President Jair Bolsonaro’s all-important pension overhaul bill is churning its way through Congress, where a lower house special committee will start analysing it as soon as Thursday.
Signs of progress boosted Brazilian assets last week Venezuela’s opposition-led National Assembly votes today on whether to make a $71mn interest payment on PDVSA’s 2020 bond, the only one not yet in default.
China will report on various measures of manufacturing PMIs for April, giving markets the first indication of how it’s stabilising in the second quarter on the back of policy support measures. 
The world’s second-largest economy grew much more than forecast in the first quarter, at 6.4% from a year earlier Taiwan will release preliminary first-quarter GDP figures today. “The critical question is whether a recession is around the corner,” after South Korea was the first in Asia to report quarterly GDP contraction in the first three months, Prakash Sakpal, an economist at ING Group NV in Singapore, wrote in a note.
Mexico releases preliminary GDP figures for the first full quarter under President Andres Manuel Lopez Obrador today. 
Economists want to see how much growth slowed as a guide for the nation’s performance for the rest of the year. The peso is the best-performing emerging-market currency this month.