LONDON (March 21): A further pullback in the US dollar and US Treasury yields on Tuesday helped to extend a winning streak by emerging market equities to the longest since last August, while Russian bond yields hit three-year lows on rate-cut expectations.

MSCI's emerging stocks index rose half a percent for an eighth straight day of gains after the US Federal Reserve's relatively dovish tone pushed down the US dollar and US yields. The index is up 4.4% this month to its highest since August 2015.

Emerging market currencies have also broadly firmed against the US dollar, though on Tuesday most retreated after hitting multi-month highs.

The exception was the rouble, as oil prices rose and cash flowed into Russian debt. It touched five-week highs while 10-year bond yields fell as rate cut expectations grew. Russian stocks rose to three-week highs.

The central bank will hold rates at 10% this Friday, 15 out of 25 analysts predicted in a Reuters poll, but the number of people expecting a cut has increased since last month as inflation approaches the 4% target.

Renaissance Capital analyst Oleg Kouzmin expects no change in rates but told clients that "thanks to the improving inflation outlook, we expect the CBR to soften its rhetoric significantly and provide clear guidance of a rate cut at one of the upcoming meetings".

He predicted a 50-basis-point (bps) cut at the bank's meeting at the end of April, with rates likely to end 2017 at 8.5% to 9.0%.

But William Jackson at Capital Economics reckons a 50-bps cut is likely this week.

"The inflation rate ... is very near the central bank's target, and it doesn't seem justified having the policy rate at 10% when inflation is at 4.5 pct and going down. So the easing cycle could be quite significant from here on," he said.

The Polish zloty has risen strongly, hitting seven-month highs against the euro thanks to data showing robust growth and inflation and slightly more hawkish rhetoric by some central bankers.

"Our sense is that any rate hikes are more likely to come in 2018. But when you have that slight shift coupled with continued very loose monetary policy by the ECB that could provide some support for the zloty," Jackson added.

Markets will also watch Nigeria's central bank meeting for clues on plans to float or devalue the naira after recent tentative moves. The bank is expected to keep interest rates at 14%.

As devaluation hopes have faded, the naira has risen in the non-deliverable forwards market, with six-month NDFs now pricing a 354 per US dollar rate, down from almost 400 a month ago.