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Agamoni Ghosh

EMERGING MARKETS-Brazil's real buoyed by pension reform proposal; stocks dip

Feb 15 2019

By Agamoni Ghosh Feb 15 Latin American currencies were mixed on Friday with the Mexican peso slipping against a strong dollar but Brazil's real rising, bucking a negative trend among its emerging market peers as investors cheered the government's release of details related to pension reform. Sao Paulo's Bovespa index slid in line with its emerging market peers on broad-based declines led by financials. The real was set to end higher for the week as traders welcomed President Jair Bolsonaro's approval of text for crucial pension reform that will be sent to Congress next week. "The pension reform is the most important thing for the Brazilian economy right now. If we don't see anything positive there, the real is likely to go on the downside," said Christian Lawrence, senior market strategist, LatAm FX, Rabobank. A note by rating agency Fitch on Friday also underlined risks within the Brazilian economy that include a further delay in pension reform along with limited expenditure reductions, and a weak and uneven macroeconomic recovery. Mexico's peso fell to a two-week low against a robust dollar, which recovered after dismal U.S. retail sales data hit the greenback. A Fitch downgrade for debt issued by Mexican state oil firm Pemex has weakened the currency for a while and stoked fears that further downgrades could significantly raise its financing costs and result in dire fiscal consequences for the government. The Mexican government has said it will inject $3.6 billion into the ailing company but analysts fear it may not be enough. "The injection is not going to save Pemex by any breadth. The size of the problem this company poses for the Mexican economy is still being underestimated the government," said Lawrence. Meanwhile, stocks on the Bovespa slid over 0.4 percent with private education firm Kroton Educacional being the biggest drag on the index. Petrobras shed 0.2 percent despite the rise in overseas oil prices, while BRF was up 1.58 percent amid reports that China will exempt 14 companies, including the company, from anti-dumping duties on imports of chicken products. Key Latin American stock indexes and currencies at 1445 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1031.50 -0.74 MSCI LatAm 2879.51 0.68 Brazil Bovespa 97640.98 -0.38 Mexico IPC - - Chile IPSA 5384.49 0.15 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 3.7116 0.75 Mexico peso 19.3565 -0.52 Chile peso 663.2 0.12 Colombia peso - - Peru sol - - Argentina peso (interbank) - - (Reporting by Agamoni Ghosh in Bengaluru; Editing by Jeffrey Benkoe)

EMERGING MARKETS-Brazil stocks rise on trade hopes; Latam currencies dip

Feb 13 2019

By Agamoni Ghosh Feb 13 Stocks in Brazil rose on Wednesday, in line with its emerging market peers, as investors welcomed a possible trade truce extension between the United States and China, while Latin American currencies weakened as the dollar recouped earlier losses. U.S. Treasury Secretary Steven Mnuchin said on Wednesday he hoped for "productive" trade meetings in China this week, a day after President Donald Trump said he could let a March 1 deadline for a trade agreement with China "slide." The news cheered global equity markets, including emerging market stocks, which were hurt last year by a strong dollar. Bank of America Merrill Lynch said on Tuesday investors saw emerging markets as the "most crowded" trade, ahead of the U.S. dollar and technology stocks amid growing worries about rising corporate debt, falling inflation and weaker global economic growth. "Perhaps over the short-term horizon if the Fed pause is accompanied by relatively subdued trade tensions between the U.S. and China emerging markets will remain in vogue," said Piotr Matys, emerging markets FX strategist at Rabobank. "However, EMs tend to perform at their best when the outlook for the global economy is positive as witnessed throughout 2017 and until early 2018," he added. Shares on the Bovespa climbed 0.3 percent, led by the energy sector as oil prices rose after top exporter Saudi Arabia said it would cut crude exports and deliver a deeper cut to its production. The biggest gainer on the index was state-run oil firm Petrobras, rising over 3 percent, while the biggest drag was BRF Foods as it recalled almost 500 tonnes of fresh chicken products citing possible salmonella contamination. Focus was also on the possible discharge of President Jair Bolsonaro from hospital following surgery and post-operative infection, which raised hopes for acceleration in the government's reform agenda, in particular pension reforms. In currencies, Mexico's peso and Brazil's real both slid about half a percent against the U.S. dollar while Chile's peso was marginally higher. Market participants in the region also watched developments in Venezuela where advisors to self-declared president, Juan Guaido, have proposed he appoint six executives to a transitional board for U.S. refiner Citgo Petroleum Corp ,the crisis-struck nation's most important foreign asset. Key Latin American stock indexes and currencies at 1330 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1042.76 0.06 MSCI LatAm 2856.42 -0.02 Brazil Bovespa 96420.02 0.36 Mexico IPC - - Chile IPSA 5392.25 0.14 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 3.7294 -0.47 Mexico peso 19.3620 -0.58 Chile peso 660.11 0.05 Colombia peso - - Peru sol - - Argentina peso (interbank) - - (Reporting by Agamoni Ghosh in Bengaluru; Editing by Bernadette Baum)

EMERGING MARKETS-EM stocks, FX fall as mood dampens over trade war, global growth fears

Feb 08 2019

* Stocks in S.Korea fall over 1 pct on intensifying trade tensions

EMERGING MARKETS-Latin American currencies subdued, Mexico rate meeting eyed

Feb 07 2019

By Agamoni Ghosh Feb 7 Latin American currencies were subdued on Thursday against a strong dollar but Mexico's peso steadied ahead of the year's first monetary policy meeting and stocks in Brazil recovered from their worst intra-day fall in eight months in the previous session. The greenback rose to its highest level in two-weeks on recent robust U.S. economic data, aided by the euro's fall after the European Commission sharply cut its forecasts for growth in the euro zone. "We think that the rally in EM fixed income will take a pause and expect to see some near-term profit-taking by investors," Morgan Stanley analysts said in a note. Mexico's peso recouped early losses ahead of Banxico's first monetary policy decision of 2019. Officials are expected to leave rates at 8.25 percent and signal a more dovish tone to accommodate future rate cuts. "We believe that the tone of the statement could be less hawkish than the previous one, more than what the market anticipates," said Banorte analysts in a note. Brazil's real slipped for the fifth consecutive session a day after the central bank held interest rates at a record low and signaled that muted inflationary pressures could keep them there for some time. A number of emerging market central banks have cut rates or stayed put after the U.S. Federal Reserve signaled a pause in further monetary policy tightening, citing global growth concerns. Stocks in Sao Paulo, led by financials, recovered after falling over 3 percent on Wednesday, their worst day in more than eight months, after a spokesman said Brazilian President Jair Bolsonaro will analyze proposals to reform the country's costly pension system when his health allows it. Bolsonaro is recovering from an operation and no date has been set for him to leave the hospital. Banco Do Brasil rose 1.31 percent after falling 6.09 percent the previous day, and Itau Unibanco and Bradesco advanced 0.94 and 0.66 percent, respectively. Shares of BRF Foods, which fell short of raising 5 billion reais at the end of an asset sale program, fell almost 5 percent. Chile's IPSA index rose marginally due to Latam Airlines, while the peso slipped further from six-month highs hit earlier in the week. Key Latin American stock indexes and currencies at 1400 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1045.05 -0.33 MSCI LatAm 2871.22 0.12 Brazil Bovespa 95160.67 0.55 Mexico IPC - - Chile IPSA 5432.01 0.1 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 3.7175 -0.36 Mexico peso 19.0927 0.16 Chile peso 653.65 0.07 Colombia peso - - Peru sol - - Argentina peso (interbank) - - (Reporting by Agamoni Ghosh)

EMERGING MARKETS-Emerging market currencies slump against robust dollar; stocks fall

Feb 07 2019

Feb 7 Emerging market currencies fell on Thursday as the dollar held onto gains aided by strong economic data, while stock indexes in the developing world slipped, with Chinese markets still shut for Lunar New Year.

EMERGING MARKETS-Currencies fall as Trump address leaves dollar strong

Feb 06 2019

Feb 6 Emerging-market currencies fell on Wednesday with the dollar climbing to its highest in nearly two weeks as investors largely ignored U.S. President Donald Trump's State of the Union address.

EMERGING MARKETS-EM shares steady with Russian stocks at record high; FX mixed

Feb 05 2019

Feb 5 Emerging market stocks steadied on Tuesday with Russian stocks testing all-time highs, while developing world currencies were mixed even as the U.S. Federal Reserve's dovish tone continued to build appetite for riskier assets.

Currencies weaken, stocks subdued in light holiday trading

Feb 04 2019

A strong dollar, rising oil prices and U.S. Treasury yields holding on to recent gains put pressure on emerging markets on Monday, with currencies falling and stocks subdued.

EMERGING MARKETS-Currencies weaken, stocks subdued in light holiday trading

Feb 04 2019

Feb 4 A strong dollar, rising oil prices and U.S. Treasury yields holding on to recent gains put pressure on emerging markets on Monday, with currencies falling and stocks subdued.

EMERGING MARKETS-Latam FX weakens; Brazil stocks rise as Congress returns from recess

Feb 01 2019

By Agamoni Ghosh Feb 1 Latin American currencies slipped on Friday, hurt by weak factory numbers in Asia and Europe even though the U.S. dollar weakened, but losses were limited by hopes for easing of global trade tensions and strong U.S. jobs data. Stocks in Brazil rose ahead of the Congress' return from an end-of-year break and discuss President Jair Bolsonaro's ambitious pro-market reforms. Brazil's real retreated from three-month highs, in line with most emerging market currencies as investors were cautious after data showed factory activity across major economies in Asia and Europe slowed, adding worries to earlier signals of a global slowdown. The currency was, however, on track to post weekly gains as expectations from the government on pension reforms remained high. Mexico's peso was on track to snap a nine-week streak of gains as a Fitch downgrade of debt-laden state oil firm Pemex left investors worried about the country's sovereign debt rating. The Chilean peso was marginally lower dragged down by a drop in the price of copper, the country's main export. Meanwhile, stocks in Sao Paulo's benchmark index rose 0.4 percent as market participants keenly watched political developments related to election for key posts in the Congress and discussion of highly anticipated pro-market reforms by Bolsonaro. The Bovespa, one of the best performers across the globe this month, did not show strong signs of ending higher for the week, pulled down mainly by iron-ore miner Vale, which shed close to 25 percent as the week started. The disaster-tainted miner experienced its worst week on record after a dam burst at one of its mines in Brazil that is expected to have taken the lives of an estimated 300 people. Investors in the region also watched developments in Venezuela as global jostling further intensified between countries that want President Nicolas Maduro in power and those trying to force him to resign, as opposition leader Juan Guaido made overtures to his rival's allies Russia and China. Fund managers on Friday told Reuters that JP Morgan has kept dollar-bonds of Venezuelan state-oil firm PDVSA in its emerging market bond indexes in a monthly rebalancing. Trading volumes of those bonds had dived following U.S. sanctions, prompting speculation that their low liquidity would result in their ejection from the widely followed indexes. Key Latin American stock indexes and currencies at 1430 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1049.88 0 MSCI LatAm 2934.79 -0.43 Brazil Bovespa 97796.93 0.41 Mexico IPC - - Chile IPSA 5429.32 0.44 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 3.6693 -0.34 Mexico peso 19.1377 -0.17 Chile peso 655.2 -0.03 Colombia peso - - Peru sol - - Argentina peso (interbank) - - (Reporting by Agamoni Ghosh in Bengaluru; Editing by David Gregorio)

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