PRESS DIGEST- Canada-June 23
June 23 The following are the top stories from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.
* Latin American currencies little changed on ECB caution * Brazil central bank signals Selic may rise soon * Brazil January industrial output higher than forecast * Brazil real gains 0.1 pct, Mexican peso unchanged By Walter Brandimarte RIO DE JANEIRO, March 7 Brazil's interest-rate futures rose on Thursday after the central bank signaled it was ready to fight inflation with tighter monetary policy, while most Latin American currencies were little changed as investors digested comments from European Central Bank President Mario Draghi. Shorter-dated interest rates in Brazil rallied as investors bet the bank could raise the base Selic rate as early as April. Longer-dated rates rose more modestly, causing the domestic yield curve to flatten, as fears that inflation could get out of control in the future lessened. Brazilian policymakers kept the Selic rate at an all-time low of 7.25 percent on Wednesday night, but made meaningful changes in the short statement released with the decision. The board of central bank directors removed a pledge to keep rates unchanged for a "prolonged period" and said it "will monitor the evolution of the macroeconomic scenario until its next meeting, when it will define the next steps in its monetary policy strategy." "Given the meaningful change in language, and the fact that such change was followed by a hike in the past two hiking cycles, the curve should move to price-in the possibility of a hike in April," Ken Lam, a strategist with Citi, wrote in a note to clients. Interest-rate contracts maturing in Jan 2014 jumped 9 basis points to 7.76 percent, while those expiring in Jan 2017 gained only 1 basis point to 8.99 percent. Higher-than-forecast industrial production for January supported the view that Brazil's economy is gradually recovering, adding to bets on a higher Selic. While the expectation of higher interest rates could attract more dollars into Brazil, the real gained a modest 0.1 percent to 1.9664 per dollar as investors feared the central bank could intervene to curb any sharp moves in the exchange rate. Latin American currency markets were also on the sidelines as ECB chief Mario Draghi spoke to the European Parliament. Investors were on the lookout for signs that the ECB could ease monetary policy, which could boost the dollar against the euro. In Mexico, speculation that the central bank could lower interest rates at the end of its monetary policy decision on Friday weighed on the peso, which remained flat at 12.7775 per greenback. Latin American FX prices at 1347 GMT: Currencies daily % YTD % change change Latest Brazil real 1.9664 0.10 3.74 Mexico peso 12.7775 0.02 0.68 Chile peso 472.0000 0.17 1.42 Colombia peso 1803.0100 0.28 -2.05 Peru sol 2.6080 -0.50 -2.19 Argentina peso 5.0600 0.00 -2.92 Argentina peso 7.8100 0.13 -13.19
LONDON, June 23 Data on Friday confirmed Italian industry entered the second quarter on a down note with contractions in sales and orders to go along with an earlier production slide.