Tag Archives: central america

THE EMERGING MARKET-Brazilian Real surged 1%, Latam shares fell after rally | Instant News


    * Real firms for a second day 
    * Copper surge supports Chile's peso
    * Mexican peso eases from 9-month high 

    By Sruthi Shankar
    Nov 25 (Reuters) - Brazil's real jumped again on Wednesday,
outperforming its Latin American peers on improving economic
data and continued  optimism over COVID-19 vaccines and U.S.
politics. 
    Brazil's real firmed for a second session, rising over
1%after figures showed the country's current account deficit
narrowed to its smallest in 2-1/2 years in October, helped by a
bigger-than-expected surplus in goods trade.  
    Worries about Brazil's fiscal health, record-low interest
rates and a second wave of coronavirus cases have hammered the
real this year, but a brighter global mood has boosted the
currency by more than 7% in November.
    The Chilean peso rose 0.3% as a surge in copper
prices to near seven-year highs supported the currency of the
world's top copper producer.
    The Colombian peso gained 0.6% , but the  Mexican
peso eased from nine-month highs.  
    Investors have rushed to riskier emerging market assets in
recent weeks after positive data on COVID-19 vaccine efficacy,
while news that U.S. President Donald Trump began cooperating
with President-elect Joe Biden's transition team ended weeks of
political uncertainty in Washington. 
    "While there has been already very strong positive news flow
surrounding the vaccine, we do not believe that the vaccine
trade is already done yet," Citi's Dirk Willer said in a note.
    "Pullbacks, maybe related to month end equity selling,
should be seen as a buying opportunity." 
    Stocks in the region edged higher, but
Brazil's Bovespa and Mexico's IPC slipped almost
0.3%.
     A Reuters poll showed Brazilian stocks will reach
pre-pandemic levels by the middle of next year, but concern
about the impact of a resurgent pandemic could limit the
recovery.
    The index is predicted to close this year at 108,000 points.
It was last trading at 109,517. 

    Key Latin American stock indexes and currencies:
    
                                       Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1217.39        -0.7
 MSCI LatAm                               2236.67        0.45
 Brazil Bovespa                         109517.84       -0.24
 Mexico IPC                              42590.89       -0.34
 Chile IPSA                               4200.68        0.08
 Argentina MerVal                        54697.84       1.038
 Colombia COLCAP                          1266.46       -0.33 Currencies                  Latest       Daily %
                                                     change
 Brazil real                               5.3201        1.02
 Mexico peso                              20.0815       -0.42
 Chile peso                                 771.1        0.30
 Colombia peso                            3612.17        0.60
 Peru sol                                  3.6078        0.03
 Argentina peso (interbank)               80.7800       -0.10
                                                   
 

 (Reporting by Sruthi Shankar in Bengaluru; editing by Jonathan
Oatis)
  

.



image source

POLL-Brazil stocks reach pre-coronavirus levels in 2021 | Instant News


* cpurl: //apps.cp./cms/? pageId = stock-index polling poll data

BUENOS AIRES / SAO PAULO / MEXICO CITY, 25 Nov (Reuters) – Stocks of razilian B will reach pre-pandemic levels by the middle of next year, but concerns about the impact of a second wave of coronavirus cases could limit recovery, a Reuters poll aired on Wednesday.

The benchmark Bovespa stock index is expected to partially cover that road by the end of 2020. The index has risen 70% from lows caused by COVID-19, which has caused nearly 170,000 deaths in Brazil.

However, Latin America’s largest equity market is seen stalling in the second half of 2021 due to concerns about the potential damage caused by a recurrence in the second-worst country after the United States.

“Increasing uncertainty and the possibility of a repeat of the lockdown in Europe and America carries a tougher scenario which, if materialized, will stop Ibovespa,” said Alexandre Jung, head of equity at Vero Investimentos.

The index is expected to close this year at 108,000 points, 0.6% above its value on Monday, and then climb to 117,500 points – close to its record in January – by mid-2021, the median estimate of 10 strategists surveyed on November 12 – 23 shows.

But it is expected to trade not too far from that level by the end of 2021, with investors on alert for any improvement in the precarious state of Brazil’s public accounts and the next steps of President Jair Bolsonaro’s administration.

Last week, credit rating agency Fitch affirmed its ‘BB-‘ rating on Brazil’s sovereign debt but maintained its negative outlook, citing a sharp widening in the government’s budget deficit and soaring debt.

“Investors will only look again at increasing their exposure to the country’s risk assets once important political and economic issues are determined in 2021, which will require a lot of effort,” Jung said.

Mexican equities are expected to return to pre-coronavirus levels by the end of next year, up 11% to 46,000 points from a forecast of a close of 41,500 on the last trading day of 2020, the survey showed.

While far short of its July 2017 record of 51,713.28 points, next year’s forecast is much more bullish than the final value forecast for the S & P / BMV IPC index in the last poll taken three months ago, at 42,600 points.

This is explained by speculation that Mexico’s central bank will maintain its dovish stance to ensure an economic recovery that does not have the massive spending stimulus imposed by its neighbors.

“As Mexico’s benchmark interest rate will likely stay at 4.0%, offering negative yields in real terms, investors will be looking for better returns on the local stock market,” said Gerardo Copca, chief market analyst at MetAnalisis.

Another story from the Reuters global stock market poll package: Reporting by Gabriel Burin; Additional polls by Peter Frontini at SAO PAULO, Miguel Ángel Gutiérrez at MEXICO CITY, Richa Rebello and Manjul Paul at BENGALURU; Edited by Ross Finley and Barbara Lewis

.



image source

THE EMERGING MARKET – Strengthened Mexican peso due to oil boost; Brazil was really hit by the second wave of fear | Instant News


    * Mexico's peso set for third straight week of gains
    * Brazil's real leads losses for the day
    * MSCI Latam stock index down 1.1%

 (Adds details, updates prices)
    By Shriya Ramakrishnan and Ambar Warrick
    Nov 20 (Reuters) - The Mexican and Colombian pesos led gains
across Latin American currencies on Friday thanks to higher
crude prices, while Brazil's real was the biggest faller on
fears of a second wave of coronavirus infections.
    Most regional currencies were set for weekly gains as
investors viewed progress towards a COVID-19 vaccine as a net
positive for sentiment.
    Mexico's currency, which rose about 0.5% to the
dollar, was also set to outpace its regional peers for the week,
as the prospects for effective COVID-19 vaccines and hopes that
OPEC and its allies will keep production in check lent support
to oil prices.
    The currency recently benefited from the Mexican central
bank pausing its rate-cutting cycle.
    "MXN is a carry story pure and simple. When adjusting for
both volatility and liquidity it is still the world's number one
carry currency," said Christian Lawrence, senior market
Strategist at Rabobank. 
    "Any periods of rising demand for risk will see support for
MXN. Domestic fundamentals don't matter at the moment." 
    Colombia's peso rose 0.5%, while Brazil's real
led losses for the day, shedding 1.3% against the dollar as
fears of a second wave of infections in Latin America's largest
economy grew.
    But the currency was set to gain for the week after the
government raised its growth forecast for the year and pledged
to fast track reforms to privatisation and fiscal spending. 
    Brazil's government also trimmed its year-end budget deficit
forecast thanks to an anticipated reduction in mandatory
spending and an increase in revenues.
    Peru's sol fell 0.5%, but was set to end a volatile
week slightly higher as political tensions in the country cooled
after the appointment of interim President Francisco Sagasti. 
    A gauge of Latin American stocks fell 1.1%
during the day, but was still set to end the week higher.    
    Chile's peso fell 0.5% even as prices of its main
export, copper, surged to their highest in 29 months on Friday.

    Argentina's central bank on Thursday said companies that
participate in the country's natural gas production plan will
have free access to the official foreign exchange
market.
    The move opens a potential loophole in strict capital
controls which have been in place since August last year, aimed
at protecting foreign exchange reserves, after the collapse of
the peso currency. 
    
    Key Latin American stock indexes and currencies:
    
                              Latest    Daily % change
 MSCI Emerging Markets         1208.74             0.69
                                        
 MSCI LatAm                    2159.51            -1.09
                                        
 Brazil Bovespa              105999.53            -0.63
                                        
 Mexico IPC                   41884.48             0.04
                                        
 Chile IPSA                    4054.32             0.65
                                        
 Argentina MerVal             51156.96            0.406
                                        
 Colombia COLCAP               1230.70            -0.01 Currencies             Latest    Daily % change
 Brazil real                    5.3791            -1.25
                                        
 Mexico peso                   20.0770             0.51
                                        
 Chile peso                      762.9            -0.52
                                        
 Colombia peso                 3630.95             0.47
 Peru sol                       3.5947            -0.53
                                        
 Argentina peso                80.3500            -0.09
 (interbank)                            
                                        
 
    

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Kirsten Donovan)
  

.



image source

THE EMERGING MARKET – Latam FX makes it easy to profit; Mexican peso, the real revival of Brazil | Instant News


    * Brazil GDP growth next year could top 4% - economy
minister
    * Mexico's peso set to snap two-day losing streak 
    * Regional stocks fall as broader EM retreats

 (Adds details, updates prices)
    By Shriya Ramakrishnan and Ambar Warrick
    Nov 19 (Reuters) - Mexico's peso and Brazil's real led gains
across Latin America on Thursday amid hopes of a swift
post-pandemic recovery in the region's two largest economies,
while most other units eased as excitement over a vaccine cooled
with a surge in global infections.
    Mexico's peso strengthened 1.1% and was set to snap a
two-day losing streak, having benefited from the central bank
recently signalling a pause to a rate-cutting cycle.
    Democratic candidate Joe Biden's victory in the U.S.
presidential election also raised hopes for more stable trade
policies.
    Mexico earlier this week completed a debt refinancing
operation worth $6.6 billion in international markets, including
a heavily over-subscribed bond offer.
    The Brazilian real added 0.6% after the economy
minister said Latin America's largest economy could surprise on
the upside and grow more than 4% next year.    
    Brazil's central bank also said on Wednesday it will
intervene in the foreign exchange market to curb year-end
volatility caused by local banks unwinding their so-called
overhedge positions.
    "Although there are multiple factors pointing to a positive
outlook for Brazil in the short to medium term–including the
stronger-than-expected recovery and preparations for mass
vaccination, the fiscal outlook remains troubling," analysts at
TS Lombard wrote in a note, adding that progress in fiscal
reforms was a sticking point for the government's credibility. 
    The government had recently pledged to fast track reforms to
privatization and fiscal spending.
    Optimism about encouraging developments in vaccines for the
novel coronavirus provided an initial boost to Latam risk
assets, but like last week, the rally ran out of steam as 
infections continued to rise and more countries outlined
economically-damaging lockdowns.
    "(Vaccines)are unlikely to have much impact broadly until at
least Q2. We think the market is a bit too sanguine and
overlooking the near-term outlook, which looks to be more like a
hole in the road than a speed bump," Mazen Issa, senior FX
strategist at TD Securities wrote in a note.
    Chile's peso fell 0.1%, while Colombia's peso
shed 0.2%.
    Peru's sol was set to end a two-day winning streak as
political uncertainty still weighed.
    A gauge of Latin American stocks fell 0.4%
after hitting a more-than eight-month high, while broader
emerging market equities also retreated.
    
    Latin American stock indexes and currencies: 
    
                              Latest     Daily % change
 MSCI Emerging Markets         1200.85              -0.55
                                        
 MSCI LatAm                    2182.01              -0.36
                                        
 Brazil Bovespa              106225.15                0.1
                                        
 Mexico IPC                   41995.30              -0.61
                                        
 Chile IPSA                    4028.50              -1.95
                                        
 Argentina MerVal             51243.13             -0.102
                                        
 Colombia COLCAP               1234.03              -0.04 Currencies             Latest     Daily % change
 Brazil real                    5.3015               0.63
                                        
 Mexico peso                   20.1360               1.12
                                        
 Chile peso                      758.7              -0.11
                                        
 Colombia peso                 3647.95              -0.18
 Peru sol                       3.5757              -0.17
                                        
 Argentina peso                80.2700              -0.12
 (interbank)                            
                                        
  
    

 (Reporting by Shriya Ramakrishnan and Ambar Warrick in
Bengaluru; editing by David Evans and Grant McCool)
  

.



image source

THE EMERGING MARKET – Brazilian Real, Peruvian soles outperform Latam FX; Shares at 8 months high | Instant News


    * Brazil govt improves 2020 GDP forecasts, promises reforms
    * Peru names Francisco Sagasti as interim president
    * MSCI Latam stocks index at over 8-mth high

 (Adds details, updates prices)
    By Shriya Ramakrishnan and Ambar Warrick
    Nov 17 (Reuters) - Brazil's real gained on Tuesday amid
improving prospects for Latin America's largest economy, while
the Peruvian sol bounced back from record lows after the country
named a new interim president.
    The MSCI's index of regional stocks rose
more than 2% to an eight-month high, with Mexican stocks
surging nearly 4% in catch-up trade.
    The prospect of accommodative monetary policy - resulting
from ultra-low lending rates - has helped emerging market
equities recover from pandemic-driven lows. 
    The real jumped 1.7% to the dollar after the
economy ministry raised its 2020 economic growth forecast to a
contraction of 4.5% from an earlier estimate of 4.7%, citing
upward revisions to third quarter activity.
    The government also said it will accelerate much-touted
reforms to public finances and privatization to restore economic
credibility in the country.
    The real has lost around 30% of its value against the dollar
this year, making it one of the worst-performing currencies in
the emerging market space, due to record-low interest rates and
growing concern over Brazil's fiscal health.
    "Rebounding capital flows to Latam would be a particular
boon to Brazil asset markets," Ilya Gofshteyn, senior EM Macro
strategist at Standard Chartered wrote in a note.
    "There is evidence that this process is already under way,
and the clearing of political hurdles in November (municipal
elections) and February 2021 (congressional leadership contests)
would open the door to further recovery."
    Peru's sol jumped 1.7%, and was set for its best day
in more than seven months after centrist legislator Francisco
Sagasti was elected by Congress as the country's interim
president.
    Sagasti will be Peru's third president in a week, after the
departures of Manuel Merino and Martin Vizcarra, and now faces
the challenge of bringing stability to a nation already hard hit
by COVID-19 and heading for its worst economic contraction in a
century. 
    "It's hard to say how stable the Peruvian political
situation will be as recent stress has been largely driven by
street protests, which are notoriously hard to predict," said
Gustavo Rangel, chief economist, LATAM, at ING.
    "Initial signs appear positive, for a calmer transition, but
I'd say it is still too soon to bet on a smooth transition."
    Other Latin American currencies marked small moves as a
continued spike in global coronavirus cases and doubts over a
vaccine dented sentiment.
    
    Key Latin American stock indexes and currencies:
    
                              Latest     Daily % change
 MSCI Emerging Markets         1202.20             -0.07
                                        
 MSCI LatAm                    2184.01               2.4
                                        
 Brazil Bovespa              107090.37              0.62
                                        
 Mexico IPC                   41996.55              2.95
                                        
 Chile IPSA                    4054.93              0.19
                                        
 Argentina MerVal             51991.68             1.775
                                        
 Colombia COLCAP               1226.27              1.36 Currencies             Latest     Daily % change
 Brazil real                    5.3481              1.69
                                        
 Mexico peso                   20.3227             -0.38
                                        
 Chile peso                      763.2              0.30
                                        
 Colombia peso                  3642.5             -0.19
 Peru sol                       3.6017              1.69
                                        
 Argentina peso                80.0300             -0.07
 (interbank)                            
                                        
 
    

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Susan Fenton and Tom Brown)
  

.



image source