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Even without all the prevailing risks to the global economy, emerging-market investors head into the first full week of May with history against them. Because in eight of the past 10 years, May has proved a losing month for stocks, currencies and local bonds in developing economies.

The uncertainty over the Covid-19 pandemic, a resurgence in US-China tension and the collapse in corporate earnings merely makes the likelihood of declines this coming week all the stronger. Emerging markets pared weekly gains last Friday, while implied currency volatility jumped by the most in six weeks as President Donald Trump revived an attack on China, speculating it could have spread the coronavirus and threatening trade tariffs.

“The biggest new development that could weigh on emerging markets is the pick-up in geopolitical tensions between the US and China,” said Eric Stein, the Boston-based co-director of global fixed income at Eaton Vance Corp., which manages about $500 billion.

“Negativity still hangs over the asset class,” even as global monetary and fiscal stimulus lifted emerging markets during April, he said.

Purchasing managers index data due for release from a number of developing countries this week will offer clues on the depth of the downturn after China’s report showed overseas demand slumped. Last month’s gains in the Indonesian rupiah and Philippine peso may be tested as the two nations announce gross domestic product data.

Interest-rate decisions will also be in focus in Malaysia, the Czech Republic and Chile. However, the most significant policy meeting may be in Brazil, where a fresh political storm involving President Jair Bolsonaro and the easing of lockdown measures even as the virus infection rate rises have combined to make the real the world’s worst-performing currency this year.

More easing

Brazil’s central bank will probably cut its key interest rate by another 50 basis points on Wednesday, even after hinting at other methods to prop up the economy

Investors will watch a lower house vote on a bill that would set a separate budget for coronavirus-related measures and allow the central bank to buy bonds in the secondary market. Brazilian policy makers will also have to take into account the release of industrial output figures for March

Malaysia’s central bank is expected to cut interest rates today for the third time this year to help shield the economy from the impact of the coronavirus. Bank Negara Malaysia lowered its overnight policy rate by 25 basis points to 2,5 percent and slashed the reserve requirement ratio by 100 basis points at its previous meeting on March 3. The ringgit has already tumbled almost 5 percent this year, and may extend losses on further easing

The central bank may be reluctant to cut again this week because of that, according to Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. Ltd. in Singapore. Bank Negara may also keep rates on hold due to there being a six-month moratorium on loans, so lower rates would have little impact right now, he wrote

Czech policy makers will probably cut the benchmark rate by half a percentage point to 0,5 percent

The outlook for more easing has boosted demand for the country’s bonds and helped the government borrow a record amount in late March and April

The rate should drop to a “technical zero” eventually, central-bank board member Oldrich Dedek said last week

Hungarian bonds have rallied as the central bank prepares to make its first purchases this week, as part of a quantitative easing program. The bank will buy government bonds and mortgage notes, primarily with maturities of at least three years, on the secondary market

Traders expect Chile’s monetary authority to hold its key interest rate steady at 0,5 percent, the lowest since 2009, when it meets tomorrow

The same goes for Peru, where policy makers are expected to leave rates at an all-time low on Thursday. The sol was one of the best-performing emerging-market currencies in April

Minutes from Colombia’s April central bank meeting, meantime, will probably make the case for more rate reductions. Mexican inflation data for April will also probably support lower policy rates

Both countries have been hit by the slump in oil prices this year, with their currencies among the worst performers in emerging markets

Argentina’s no deal?

Investors have until Friday to accept Argentina’s proposed debt exchange, although an agreement seems far off.

The government needs support from creditors owning at least two-thirds of the aggregate holdings, but tensions have been so high that some large bondholders won’t even join video calls with officials.

Without a deal, a hard default is becoming more likely, according to Bloomberg Intelligence’s Damian Sassower

Dismal data

Manufacturing data will be in focus in Asia this week with South Korea, Taiwan, Malaysia, Thailand, the Philippines, Indonesia and India all releasing purchasing managers’ index numbers for April.

China’s PMI figures published April 30 showed overseas demand slumped, though there were some signs of a domestic rebound

Indonesia’s economy probably grew 4,52 percent to 4,68 percent in the first quarter, Finance Minister Sri Mulyani Indrawati said April 17. The nation will release the official data today

Philippine data are due Thursday. The country is likely to see a U-shaped economic recovery with a gradual rebound taking place in the fourth quarter, central bank Governor Benjamin Diokno said April 25

China’s markets were shut yesterday and today for holidays, and the nation will report trade data for April on Thursday. Taiwan will release its trade statistics for the same month on Friday

Currency-reserves data are also due this week from China, Malaysia, Thailand, the Philippines and Indonesia