London: Emerging equities touched a one-week high on Thursday with the Mexican peso hitting a six-week peak after the final US presidential debate before the November 8 election gave no clear boost to Republican candidate Donald Trump.

Democratic candidate Hillary Clinton was again judged the winner of the debate according to a snap CNN poll, although Trump, who has seen his ratings come under pressure recently, said he may not accept the outcome of the election if he loses.

The peso, the chief proxy for market pricing of Trump’s chances, firmed to 18.455 per dollar in Asian trading after the debate’s conclusion, its highest level since September 8.

It later gave up some of those gains, retreating 0.3 per cent, after European traders arrived at their desks.

“It has been driven to a degree by opinion polls in the US and it strengthens when there’s a higher likelihood of Hillary Clinton winning,” said William Jackson, senior EM economist at Capital Economics.

Trump’s threats to tear up a US free trade deal with Mexico and block remittances sent home by Mexicans living in the United States to fund a border wall pushed the peso to record lows last month.

It has rallied over 7 per cent since, but Jackson said that with the election out of the way, fundamental factors such as the current account position and weak oil prices could reassert themselves.

Asian constituents

The benchmark emerging stocks index traded flat after touching one-week highs earlier in the session, helped by a decent performance in big Asian constituents such as Taiwan, which rose 0.36 per cent to a 15-month high.

Hong Kong stocks rose 0.3 per cent but mainland Chinese stocks delivered a lacklustre performance. European bourses were similarly patchy, with a 0.25 per cent rise in Polish shares offset by a 0.7 per cent fall in Russian dollar-denominated stocks.

The Russian rouble also weakened 0.4 per cent against the dollar, as Brent crude futures dipped towards $52 a barrel after a rally on Wednesday.

Oil producer Saudi Arabia’s stocks bounced over 1 per cent, however, with investors cheered by the kingdom’s $17.5 billion mega-bond sale, which could help unclog liquidity in the economy.

The international bond saw heavy grey-market trading early on Thursday, with the prices of all three tranches rising from the re-offer price, traders said.

Five-year credit default swaps for Saudi narrowed seven basis points (bps) to 136 bps, according to Markit data, the lowest level since early December 2015.

The Turkish lira weakened 0.3 per cent against the dollar ahead of a central bank meeting at which it is expected to cut the overnight rate by 25 basis points to 8 per cent.

Jackson at Capital Economics said that if the central bank does cut, he expects little impact on financial markets as the move was largely priced in. It was also likely to mark the end of the easing cycle.

Rate cut

“The inflation outlook is still pretty poor, the current account deficit is widening, they may be cautious because of upcoming hikes by the US. Fed and the currency has already weakened quite a bit over the past few weeks. So they could stay on hold after this meeting,” he said.

The South African rand slipped 0.7 per cent, with central bank governor Lesetja Kganyago saying the bank may be nearing the end of its interest rate hiking cycle, whilst setting a high bar for a rate cut.

The Brazilian real was steady after the central bank cut interest rates for the first time in four years on Wednesday, opting for a modest 25 bps cut, but warning it could go for steeper cuts in future.