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  Emerging stocks, bonds fall as Asian FX losses spiral REUTERS   
  Emerging stocks fell 1.5 percent on Tuesday, currencies tumbled to yet more lows and bond yield spreads blew out to their highest in five weeks in the wake of U.S. Treasury yields' surge to two-year highs.

Emerging assets will get little respite ahead of the Wednesday release of Federal Reserve minutes, which could indicate whether the U.S. central bank is indeed on track to start paring back its money-printing from next month.

In addition, data from China due on Wednesday is expected to show that growth remains under pressure in the world's No. 2 economy.

U.S. 10-year yields have risen a percentage point since mid-May, hitting emerging stocks and bonds and sparking a rout in currencies whose fortunes are linked to foreign capital flows.

"Concerns are clearly escalating. The newsflow from Asia is horrific and the policy reaction is stop-start," said Lars Christensen, chief emerging markets analyst at Danske Bank. "I don't see this stopping until we get clarity on the Chinese macro situation.

Christensen said the currency weakness would continue to filter through to stock and bond markets as foreign dollar-based investors see their losses piling up.

"People are worried the currency selloff will continue.. The problem is if central banks try to curb it, they take out liquidity from the markets," he added.

MSCI's emerging equity index fell to a one-month low for its fourth straight session of losses. Chinese mainland shares also fell while Indian markets lost 1.5 percent led by declines in financials shares that will be hit by the rupee decline and potential policy tightening steps.

The rupee fell to a fresh record low, forcing the central bank to intervene in the market while the Indonesian rupiah hit fresh four-year lows.

The rupiah losses filtered through to the Jakarta equity market which fell 4.5 percent, extending the previous session's 5.6 percent crash.

Indonesian dollar bonds were also feeling the heat, with their spreads over U.S. Treasury yields blowing out 11 basis points. The broader JPMorgan emerging debt index saw spreads widen 6 basis points, their widest level since mid-July.

Other emerging equity and debt markets will take a hit in coming days, analysts predict.

"Apart from rising global yields and the strong dollar trend, we believe the weakness in several key high-yielding emerging markets - including India and Indonesia - is spilling over into the rest," Barclays told clients.

Emerging Europe however was relatively resilient, with the Polish zloty up 0.2 percent versus the euro after several days of losses while the rouble and the rand were flat to the dollar.

But South African bond yields hit 19-month highs. Polish yields steadied off two-month highs. Russian stocks fell 1 percent.

The lira was flat before a central bank interest rate announcement. While no changes are expected, many are calling on Turkey to announce more policy tightening steps to prevent the lira joining in the global selloff.

Stock markets fell 0.7 percent in anticipation.

In Egypt, turmoil continued as the leader of the Muslim Brotherhood was arrested but Cairo stocks rebounded 1.2 percent after three sessions of losses, on hopes the army-backed government will get the crisis under control.
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