(Bloomberg) -- Emerging-market assets rose last week as optimism over the reopening of economies in Europe and the U.S. outweighed rising U.S.-China tensions. Stocks even edged higher on Friday after Chinese lawmakers approved a proposal for new national security legislation in Hong Kong and President Donald Trump intensified his confrontation with the Asian nation. Argentina published a new debt offer that shortens its payment delay, while central banks in South Korea, Poland and Colombia all cut interest rates.

The following is a roundup of emerging-market news and highlights for the week through May 31:

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Highlights:

  • Chinese lawmakers approved a proposal for sweeping new national security legislation in Hong Kong that democracy advocates say will curb essential freedoms in the city

    • In response, the U.S. said it could no longer certify Hong Kong’s political autonomy from China and Trump intensified his confrontation by moving toward revoking the territory’s special trade status under U.S. law, while ratcheting up verbal attacks on China
  • Argentina published a new debt offer that shortens its payment moratorium to two years and delays principal payments for half a decade
    • Argentina’s ninth default on its external debt became official after some of its bonds were cut to default status by two rating companies; the CDS Determinations Committee was asked to rule on whether a “failure to pay” credit event occurred
  • Latin America now accounts for 40% of the world’s daily coronavirus deaths
    • Brazil has more cases than any country except the U.S., while Mexico had its largest single increase in cases and fatalities; Brazil overtook Spain and now ranks fifth in the world in number of coronavirus deaths
    • President Donald Trump blocked some travel from Brazil
  • Trump signed an executive order that seeks to limit liability protections social-media companies enjoy after Twitter Inc. began selective fact checks of his posts
  • Russia and Saudi Arabia agreed to closely coordinate on the deal reached by OPEC+ to cut output, two weeks ahead of a crucial meeting of the group; Russia sees the market balancing in June or July
  • Bank of Korea Governor Lee Ju-yeol said the central bank is considering using unconventional policy tools to support growth, after cutting rates to a record and forecasting the first economic contraction since the Asian financial crisis
  • Poland unexpectedly lowered borrowing costs for the third time in three months to stem the economic damage from the coronavirus
  • Marton Nagy, the architect of Hungary’s ultra-loose unconventional monetary policy, unexpectedly resigned from his position as deputy governor of the central bank

Asia:

  • People’s Bank of China Governor Yi Gang said the central bank will focus on five measures to support credit provision to the real economy
    • President Xi Jinping’s government is throwing the might of the Chinese state behind the country’s vaccine developers
    • The offshore yuan steadied near a record low
    • A gauge of China’s manufacturing activity slipped in May, underlining the slow pace of recovery from the first-quarter slump

  • India announced a phased lifting of the nationwide lockdown by allowing malls, restaurants and places of worship to open from June 8

    • India’s economy was pushed into a state of dormancy in April; its key services industries have come to a standstill during the coronavirus outbreak
    • Economic growth slowed to 3.1% in the first quarter, just as the government began lockdowns
    • Country moved additional troops along its northern border as it prepares for an extended conflict with China after several rounds of talks failed to ease tensions
    • Nation’s coronavirus death toll has topped China’s
  • South Korea’s consumer confidence jumped in May from the lowest since the global financial crisis
    • Prosecutors have summoned Samsung Electronics Co. Vice Chairman Jay Y. Lee for questioning in an ongoing investigation
    • South Korea reported its biggest spike in new coronavirus cases in nearly two months, raising fears of a second wave of infections
  • Taiwan’s economy remained at “transitional stage between sluggish and stable” in April
  • Indonesia deployed hundreds of thousands of army and police personnel to enforce social distancing rules after a record surge in infections
    • Bank Indonesia sees the rupiah continuing to strengthen, while inflows into government bonds are also picking up
    • Foreign investors were behind the outperformance of Indonesian bonds in May
  • The Philippines’ Trade Department wants lawmakers to pass a 1.3-trillion peso ($26 billion) stimulus package to aid the recovery of industries and displaced workers
    • The Philippine central bank is currently revisiting the revised balance of payments forecasts for 2020, which include the latest FDI estimates
    • The World Bank has approved a $500m loan to the Philippines to help mitigate the impact of the Covid-19 pandemic
    • Philippine banks will play a crucial role in the country’s recovery process and lawmakers shouldn’t weaken them, central bank Governor Benjamin Diokno said
  • Bank of Thailand governor Veerathai Santiprabhob decided against seeking a second term
    • The Thai Cabinet approved a plan for 39.4b baht in cash handouts to 13 million people
    • Thailand will prepare for a lockdown exit, with the state of emergency due to end in June
    • Thailand posted its first current-account deficit since May 2019
  • Malaysia’s former leader Mahathir Mohamad is fighting a dismissal from his own political party

EMEA:

  • Russia is beginning to boost government spending significantly to fund the fight against the crisis. This will lead to a meaningful increase in ruble bond issuance, Deputy Finance Minister Alexei Moiseev said

    • Moscow is to ease a lockdown as the number of new infections continues to slow
    • Russia’s retail sales plunged the most since records began
    • Russia’s Health Ministry granted a temporary registration certificate to the country’s first Covid-19 medicine, a generic version of the Japanese flu drug Avigan
  • Poland’s inflation eased for a third month in May
  • Turkey’s economy built up enough momentum at the start of the year to clock one of the fastest expansion rates among in peers during the first quarter, a period mostly before coronavirus lockdowns began to take hold
    • The Turkish central bank boosted its short-term borrowing of hard currency from local lenders to a record as it looked to boost international reserves after an effort to defend the lira
  • Saudi Arabia’s economy can absorb a decline in revenue and a budget shortfall, and is able to deal with the consequences of the coronavirus, Finance Minister Mohammed al Jadaan said
  • Lebanon’s central bank will secure as much as $100 million for imports of raw materials for the industrial sector through local banks
  • Kenya’s central bank maintained its benchmark rate to allow the effects of four consecutive cuts filter to the economy
  • South Africa stands to lose five years of potential economic output due to the shock from the coronavirus, according to the central bank
    • South African business leaders lauded the government’s plan to substantially ease a nationwide lockdown that’s crippled the economy, even as the number of the coronavirus cases grows
    • Trade balance unexpectedly swung to a record deficit from a record surplus in April
  • Ghana’s interest payments for the first four months of the year surged to the highest since the authorities started compiling the data
  • Nigerian economic growth beat estimates in the first quarter as oil production rose to the highest in at least four years
  • The African Development Bank’s board agreed to an independent probe of its president, Akinwumi Adesina, after the U.S. rejected an internal investigation that cleared him of allegations of favoritism, according to people familiar with the matter
  • Israeli Prime Minister Benjamin Netanyahu‘s top economic adviser said raising taxes would be a “big mistake” as the economy begins to recover
  • Emirates Group said it will be forced to cut jobs as the operator of the world’s largest long-haul carrier seeks to reduce costs
  • Iran provided its first death toll from its crackdown on protests that erupted after a November 2019 fuel hike, estimating some 200 people were killed

Latin America:

  • Two Latin American airlines have filed for bankruptcy and investors are already casting doubt on some of the largest remaining carriers
    • Argentina may have to dole out at least $880 million in subsidies this year to keep its state airline afloat, further weighing on government finances
  • Brazil’s stocks and currency rallied after a video of a cabinet meeting that was cited as evidence that President Jair Bolsonaro tried to interfere with the federal police failed to shed new light on the allegations
    • Politics were still in focus as the federal police targeted Bolsonaro allies as part of an investigation mandated by the Supreme Court into the spread of fake news; Rio de Janeiro Governor was targeted by another investigation into misuse of funds to fight the pandemic
    • Bolsonaro vetoed exceptions to a salary freeze for public servants as requested by Economy Minister Paulo Guedes
    • GDP fell 1.5% in the first quarter from the previous three-month period, the biggest quarterly tumble in nearly five years
    • Consumer prices fell for the second month, fueling bets on another rate cut; the unemployment rate rose for the fourth month, while the fiscal deficit is expected to climb to a record in April, May and June
    • Sao Paulo will allow some businesses to resume activities after the state government announced guidelines for cities to reopen

  • Argentina’s Exchange bondholder group said it was confident that its joint debt proposal with the Ad Hoc Argentine bondholder group provided a sound basis for a collaborative solution to the debt talks

    • Central bank announced new restrictions for companies seeking access to the foreign-exchange market, but later said it intends to ease currency restrictions if the government reaches an agreement with creditors that is well received by markets
    • Buenos Aires province extended the period for bondholders to accept its offer to exchange bonds through June 5
    • Argentina’s primary deficit surged in April due to fiscal stimulus
  • Mexico could have its worst economic contraction in almost a century this year, the central bank said
    • GDP contracted a little less than estimated in the first quarter and the country posted a surprise trade deficit in April
    • State-owned utility CFE doubled down on demands for regulators to protect its market share
    • The Mexican peso recorded its best month in a quarter century as investors started to look beyond the global lockdown
  • Chile’s government is struggling to control the coronavirus outbreak that’s pushed hospitals toward collapse and could threaten to revive mass social unrest
    • Unemployment rate rose to the highest in a decade and retail sales slumped by almost a third in April
  • Peru’s Finance Minister said the country must expand cash handouts and payroll subsidies amid the economic crisis; the nation is working on moving to the second phase of reopening in June
    • The International Monetary Fund approved an $11 billion credit line for Peru
  • Colombia cut its key interest rate by half a percentage point for a third straight month, to 2.75%
    • Central bank governor said interest rates may be cut further, but at a gradual pace
    • Jobless rate surged even more than expected in April amid deepest economic crisis in more than a century
  • Costa Rica’s bonds fell after Finance Minister Rodrigo Chaves resigned, raising concerns about the government’s ability to curb one of Latin America’s widest fiscal deficit

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