Tag Archives: MARKET / LATAM (UPDATE 1)

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)
  

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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)
  

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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)
  

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THE EMERGING MARKET-Brazilian real, Mexican peso have been hit by the warm economic data | Instant News


    * Mexican central bank meeting eyed for Thursday
    * Peruvian sol recovers from 18-year low
    * Brazil's real still set for strong recovery -analyst

 (New throughout, updates prices, market activity and comments)
    By Ambar Warrick and Shreyashi Sanyal
    Nov 11 (Reuters) - Brazil's real dipped on Wednesday after
retail sales came in weaker than expected, while most other
Latin American currencies retreated as investors focused on
prospects for a COVID-19 vaccine.
    The real fell as much as 0.6% even though data
showed September retail sales rose to a record high, up for the
fifth straight month. Still, the increase was the smallest in
months and only around half of what economists expected,
indicating stress from the pandemic on Latin America's largest
economy.
    Analysts did say Brazil's economic fundamentals were far
stronger than most other countries in emerging markets, and a
post-pandemic recovery for the real was due.
    "Given that the real is very cheap at current levels, we do
not think that a continued sell-off in the real at the rate
witnessed since the onset of the crisis is likely in the
long-term," said Matthew Ryan, senior market analyst at
financial services provider Ebury.
    "We are instead continuing to pencil in a recovery for the
currency against the dollar through to the end of 2021," he
said.
    Ryan cited Brazil's strong foreign exchange reserves as a
reason to buy the real, along with low external debt and a
manageable current account deficit.
    While optimism over a potential vaccine spurred a rally in
emerging markets early this week, a continued rise in global
coronavirus cases and signs of the pandemic's economic fallout
saw markets retracing their steps. The U.S. dollar rose on
safe-haven demand.
    Mexico's peso fell 0.8% after industrial output was
flat in September - a sign that a fledgling recovery may be
stalling.
    Investors also awaited a policy decision from the Mexican
central bank, which was expected to cut its benchmark interest
rate on Thursday. 
    "This week's meeting is a tough call and we certainly cannot
rule out a 25bp cut, indeed, MXN price action over the past week
arguably supports a decision to cut rates now rather than
waiting," said Christian Lawrence, senior cross-asset strategist
at Rabobank. 
    Losses in Chile's peso were limited by the prices of
copper, the country's top export, holding at a near 29-month
peak.
    Colombia's peso was supported by strength in the oil
market.
    Peru's sol recovered slightly from an 18-year low
after Manuel Merino was sworn in as interim President of Peru on
Tuesday, following President Martin Vizcarra's ouster by
Congress a day earlier.

    Key Latin American stock indexes and currencies:
     
          Stock indexes                   Latest   Daily %
                                                   change
 MSCI Emerging Markets                    1178.00    -0.16
 MSCI LatAm                               2108.57    -0.63
 Brazil Bovespa                         104899.47    -0.16
 Mexico IPC                              40779.90     0.93
 Chile IPSA                               3973.58     -0.1
 Argentina MerVal                        51766.97     -0.1
 Colombia COLCAP                          1221.50     0.67
                                                          
              Currencies                  Latest   Daily %
                                                   change
 Brazil real                               5.4133    -0.44
 Mexico peso                              20.5189    -1.00
 Chile peso                                 754.4     0.17
 Colombia peso                            3639.24    -0.32
 Peru sol                                  3.6218     0.02
 Argentina peso (interbank)               79.4800    -0.05
                                                   
 Argentina peso (parallel)                    158    -5.70
                                                   
 
 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru;
editing by Emelia Sithole-Matarise and David Gregorio)
  

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EMERGING MARKET-Brazilian Real hit 5 month low ahead of interest rate moves; Latam FX is falling | Instant News


    * Real falls as central bank seen keeping rates unchanged 
    * FX market volatility rises on U.S. election uncertainty
    * Latam stocks index set for worst day since late April 

 (Updates prices throughout; adds comments, bullets)
    By Shreyashi Sanyal
    Oct 28 (Reuters) - Brazil's real touched a five-month low on
Wednesday on expectations the central bank will leave its policy
rate unchanged, while other Latin American currencies fell on
uncertainty about the outcome of U.S. elections.  
    The real tumbled 1.2% to fall for the fourth
straight day as Brazil's central bank was seen leaving its
benchmark Selic rate at a record low of 2.0% at 2100 GMT. 
    "The extension of the budget deficit in an effort to fight
the effects of the pandemic is limiting the central bank's scope
to cut rates further," said Melanie Fischinger, FX and emerging
markets analyst at Commerzbank. 
    Brazil's currency is among the worst performing emerging
market units this year, falling 30%, as fears remained about the
 government overshooting its spending ceiling to fund a new
fiscal package. 
    "It is looking increasingly likely that the Brazilian
government will violate its constitutional spending cap, or at
least the spirit of it," said Thomas Mathews, markets economist
at Capital Economics. 
    "Abandoning the cap would see further depreciation of the
real against the U.S. dollar, and perhaps an increase in
Brazilian government bond yields."
    Most emerging market currencies weakened against the dollar
 as traders hedged against the possibility of a Democratic
sweep in Tuesday's U.S. elections. Gauges measuring expected
swings in foreign exchange markets rose, with one-week contracts
that cover the vote reaching their highest levels in nearly
seven months.
    Surging novel coronavirus cases also kept risk sentiment at
bay, while a 5% fall in oil prices pushed currencies of
crude-exporters including Mexico and Colombia
lower.
    The Mexican peso tumbled more than 0.9%, while Colombia's
peso slipped 0.5%. 
    Chile's peso bucked an eight-day winning streak to
fall 0.1%, with local investors focusing on the country's path
to reframe its constitution.   
    Argentina auctioned a dollar-linked bond and other debt for
a total of about $3.18 billion on Tuesday, the economy ministry
said, as the government looks to ease pressure on the battered
peso currency. The country's peso currency was flat. 
    The MSCI's index for Latin American stocks
tumbled 4.5%, on track for its worst one-day percentage decline
since late April. 
    Sao Paulo stocks tumbled 3.5%, with heavyweight
miner Vale falling 2%. 
    Santiago stocks dropped 1.8%, weighed by a 2%
decline in shares of Banco Santander-Chile after
it expected to show a fall in quarterly revenue.
    
    Latin American stock indexes and currencies at 1915 GMT:
            Stock indexes                    Latest   Daily %
                                                      change
 MSCI Emerging Markets                       1120.34     -1.2
 MSCI LatAm                                  1841.97    -4.52
 Brazil Bovespa                             96080.05    -3.54
 Mexico IPC                                 37444.13    -1.47
 Chile IPSA                                  3630.24    -1.81
 Argentina MerVal                           44391.44   -4.959
 Colombia COLCAP                             1130.56    -2.75
                                                             
               Currencies                    Latest   Daily %
                                                      change
 Brazil real                                  5.7483    -1.16
 Mexico peso                                 21.2051    -0.83
 Chile peso                                    773.7    -0.12
 Colombia peso                                3828.5    -0.55
 Peru sol                                     3.6117    -0.14
 Argentina peso (interbank)                  78.3000     0.01
                                                      
 Argentina peso (parallel)                       174     4.02
 


 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Bernadette Baum and Grant McCool)
  

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