Edition:
International

Ambar Warrick

EMERGING MARKETS-Brazil's real, Chile's peso lead Latam higher on commodity gains

9:50am EST

* Chile's copper exports jump more than 35% in November * Brazil's central bank seen hiking rates on Wednesday * Higher oil prices support Colombia's peso By Shashank Nayar and Ambar Warrick Dec 7 Brazil's real and the Chilean peso led gains across Latin American markets on Tuesday as liquidity-boosting measures by China helped support sentiment, while data also showed inflation appeared to be cooling in the two countries. The real and the peso rose about 0.8% each, after the Chinese central bank's decision to cut bank reserve requirements supported metal prices on hopes that economic activity in China would pick up. China is among the top metal consumers in the world, and improving economic conditions there point towards more demand for commodity exports from Latin America. Signs of cooling inflation in Brazil and Chile further supported sentiment. A private survey showed Brazilian inflation fell in November, while separate data showed Chilean consumer prices grew at a slower pace in November from the prior month. In Brazil, investors were awaiting an interest rate hike of 150 basis points by the central bank on Wednesday. The bank has been among the most aggressive emerging market central banks this year in hiking rates to curb inflation. "Brazil is trying to ride out the hump in this spike in inflation, and they can't be seen to be curtailing their tightening cycle when headline inflation is powering ahead, which could leave inflation expectations vulnerable," said Chris Turner, global head of markets at ING. "They're probably expecting to see a turn in inflation by Q2 (2022), and the market is looking at rate cuts in 2023. But job No.1 at the moment is keeping a lid on inflation expectations." Central banks across emerging markets have hiked interest rates several times this year to help curb rising inflation pressures brought about by soaring energy costs and supply-side problems. Chile, the world's top copper exporter, saw copper exports soar more than 35% to $4.92 billion in November, the Andean country's central bank said, further supporting its currency. Oil exporter Colombia's peso added 0.6% as crude prices rose nearly $2 a barrel, extending a rebound as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased. MSCI's index of Latin American stocks and currencies gained 0.9% and 0.3%, respectively. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1232.22 1.5 MSCI LatAm 2107.54 0.94 Brazil Bovespa 107907.56 0.98 Mexico IPC - - Chile IPSA 4402.54 0.77 Argentina MerVal - - Colombia COLCAP 1430.66 -0.09 Currencies Latest Daily % change Brazil real 5.6462 0.80 Mexico peso 21.2610 -0.25 Chile peso 838.4 0.84 Colombia peso 3905.2 0.61 Peru sol 4.0738 0.09 Argentina peso 101.3500 -0.05 (interbank) (Reporting by Shashank Nayar in Bengaluru Editing by Paul Simao)

EMERGING MARKETS-Stocks, FX rise as mood improves; Evergrande debt woes in focus

3:41am EST

Dec 7 Most emerging market stocks and currencies rose on Tuesday, tracking gains in broader markets with concerns over the Omicron variant receding but potential debt defaults in China's property market still in focus.

EMERGING MARKETS-Latam FX muted as Omicron, China property concerns weigh

Dec 06 2021

* Oil exporting currencies gain * Latam stocks rise in early trade By Ambar Warrick Dec 6 Latin American currencies moved little on Monday as uncertainty over the Omicron coronavirus variant kept sentiment subdued, while investors feared a spillover from a potential default in China's property market. Brazil's real and Peru's sol all marked small moves in early trade, while gains in oil prices pushed up currencies of exporters Mexico and Colombia. Concern of contagion from any default in China's property market intensified as China Evergrande Group set up a risk management committee, and was likely headed towards debt restructuring amid a serious liquidity crunch. "While Evergrande has paid coupons before the end of its 30-day grace period, it is likely that it did so to buy more time as onshore lenders increasingly ring-fence their collateral and subordinate offshore investors," analysts at TS Lombard wrote in a note. A slowdown in China, particularly in its massive property sector, would bode poorly for Latin American economies, which are large exporters of raw materials such as iron ore and copper -- commonly used in construction. But China's central bank cut reserve requirements for banks earlier in the day, releasing more liquidity to shore up slowing economic growth. The move pushed up raw material prices, as investors bet that liquidity in markets would offset the immediate economic impact from the property sector. Chile's peso rose about 0.2%, tracking copper prices higher. Latam stocks rose in early trade, recovering further from lows hit last week on concerns over the Omicron variant. But sentiment remained on edge. Brazil's Bovespa index added 1.1%, with mining and material stocks leading gains. Strength in oil prices pushed up shares of state-run oil company Petrobras by around 1%, despite confusion over potential fuel price adjustments. Petrobras said it did not anticipate any decisions regarding fuel price adjustments, in a response to President Jair Bolsonaro, who said on Sunday that the firm would start lowering fuel prices as early as this week. On the economic data front, readings showed Mexican auto production and exports tumbled in November, while production in Brazil rose 15.1% from the prior month. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1212.91 -0.96 MSCI LatAm 2078.43 0.72 Brazil Bovespa 106206.21 1.08 Mexico IPC - - Chile IPSA 4404.95 0.81 Argentina MerVal 86420.56 0.07 Colombia COLCAP 1431.94 -0.62 Currencies Latest Daily % change Brazil real 5.6858 -0.14 Mexico peso 21.2245 0.19 Chile peso 838.4 0.24 Colombia peso 3945.7 0.45 Peru sol 4.0753 -0.16 Argentina peso 101.3100 -0.14 (interbank) (Reporting by Ambar Warrick; Editing by Alison Williams)

EMERGING MARKETS-Stocks fall on Chinese tech losses, real estate jitters return

Dec 06 2021

* Evergrande plummets on debt warning, contagion fears increase

EMERGING MARKETS-Stocks fall on Chinese tech losses, South African rand leads FX gains

Dec 06 2021

Dec 6 Emerging market stocks fell close to a one-year low on Monday, tracking losses in major Chinese technology stocks, while South Africa's rand rose on early signs that the Omicron coronavirus variant may be causing largely mild infections.

EMERGING MARKETS-Latam stocks set for strong week, Mexican peso races past peers

Dec 03 2021

* Mexican peso up 3.4% this week * Brazil industrial production disappoints * EM FX muted after weak U.S. payrolls By Ambar Warrick Dec 3 Latin American stocks rose on Friday and were set for strong weekly gains as they recovered from a virus-driven selloff, while Mexico's peso was the best performing emerging market currency this week as it bounced back from a 14-month low. MSCI's index of Latam stocks rose 1.6%, and was set to add 3.2% this week, after concerns over the new Omicron coronavirus variant drove it to a 13-month low. Mexico's peso was flat against the dollar, and was the best performing emerging market (EM) currency this week - set for a gain of 3.4%. Investors also welcomed Mexican finance ministry official Victoria Rodriguez as the new head of the central bank. Rodriguez assured lawmakers this week that she was committed to upholding the Bank of Mexico's independence, following initial concerns over political interference after her surprise pick by President Andres Manuel Lopez Obrador. Broader Latam currencies logged small moves amid investor uncertainty over whether weak U.S. payrolls data would convince the Federal Reserve to delay plans to tighten policy. "The labor market is reaching its full potential and inflationary forces are already elevated, which is why the Fed is feeling more urgency to complete their tapering early and may need to raise interest rates more quickly than many people are expecting," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. Brazil's real led early gains in Latam with a 0.7% rise, though it was set to end the week largely unchanged and traded near lows hit last week. Disappointing industrial production data rounded off a batch of weak economic readings from Brazil this week as surging inflation and lingering shocks from the pandemic saw Latam's largest economy slip into a third quarter recession. "The poor performance of the overall economy means that Brazil is at an even lower starting point going into 2022... Longer-term growth hinges on passing reforms and improving productivity, which appear increasingly unlikely," analysts at TS Lombard wrote in a note. Most EM currencies also shed initial gains, while the dollar was little changed after the payrolls report, trading slightly higher. Elsewhere, a report from the U.S. Treasury said no major trading partners, which include several emerging market economies, engaged in currency manipulation. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1229.31 -0.56 MSCI LatAm 2110.82 1.58 Brazil Bovespa 106133.99 1.6 Mexico IPC - - Chile IPSA 4434.01 1.44 Argentina MerVal 88599.17 1.313 Colombia COLCAP 1447.92 0.49 Currencies Latest Daily % change Brazil real 5.6216 0.66 Mexico peso 21.2440 0.02 Chile peso 837.5 -0.18 Colombia peso 3936.79 -0.07 Peru sol 4.074 -0.27 Argentina peso 101.1700 -0.07 (interbank) (Reporting by Ambar Warrick Editing by Mark Heinrich)

EMERGING MARKETS-FX set for strong weekly gains, Turkey's lira lags after inflation spike

Dec 03 2021

Dec 3 Emerging market stocks and currencies retreated on Friday in cautious trade ahead of key U.S. employment data, but were set for strong weekly gains on hopes that the impact of the Omicron coronavirus variant would be limited.

EMERGING MARKETS-Latam FX recover but Omicron worries remain

Dec 02 2021

* Brazilian economy shrinks in Q3 * Mexican peso jumps 1.7% (Updates prices) By Ambar Warrick and Susan Mathew Dec 2 Most Latin American currencies firmed on Thursday, although sentiment remained fragile on uncertainty over the Omicron coronavirus variant, and as economic worries rose with data showing Brazil sank into a recession in the third quarter. Brazil's economy, Latin America's largest, contracted 0.1% in the three months to September, amid surging inflation and a severe drought. Brazil's economic rebound has sputtered as inflation surged into double digits, forcing the central bank to raise borrowing costs aggressively. This comes as investors worry about the potential economic fallout from the Omicron variant as countries ramp up measures and travel curbs. Brazil's real rose 0.3%, taking some support from expectations of improving demand for iron ore exports to China. Brazilian stocks rose 2.6%, recovering from a 13-month low. Analysts flagged some positives for the economy going into 2022, particularly for sectors yet to fully recover from the pandemic. "We expect some of the still COVID impacted services sectors (in particular services to households) to recover further in coming months in tandem with further progress on the COVID vaccination program and renewed fiscal stimulus," analysts at Goldman Sachs wrote in a note. But they also see surging inflation and political uncertainty weighing on economic activity in the coming months. Brazil's Senate on Thursday passed the main text of a constitutional amendment that will ease the government's spending cap and open room for a larger welfare program. Mexico's peso jumped 1.7%, as it recovered from a more than one-year low hit last week. Mexican President Andres Manuel Lopez Obrador's pick for the next central bank head, Victoria Rodriguez, underlined her commitment to central bank independence, days after her nomination roiled markets amid concerns over political interference. On the geopolitical front, Mexico is analyzing a range of responses to a proposed U.S. electric vehicle tax credit and would even consider applying tariffs, Mexican Economy Minister Tatiana Clouthier said on Thursday. For Argentina, a potential deal with the International Monetary Fund (IMF) to roll over some $45 billion it owes would be a key breakthrough, but not enough to lift the embattled country's credit rating, Moody's said on Thursday. Broader emerging market currencies also recovered from recent losses on Thursday, although investors were awaiting more data on the COVID front. But Turkey's lira dropped 3%. The central bank signaled it will pause rate cuts in 2022. Key Latin American stock indexes and currencies: Stock Latest Daily % change indexes MSCI Emerging Markets 1233.89 0.58 MSCI LatAm 2055.42 0.73 Brazil Bovespa 103399.30 2.6 Mexico IPC 50838.23 1.66 Chile IPSA 4364.64 0.74 Argentina MerVal 86297.17 1.33 Colombia COLCAP 1421.25 0.21 Currencies Latest Daily % change Brazil real 5.6532 0.30 Mexico peso 21.3441 0.74 Chile peso 837.2 0.08 Colombia peso 3934.2 0.75 Peru sol 4.0672 0.07 Argentina peso (interbank) 101.0900 -0.07 (Reporting by Ambar Warrick; Editing by Frances Kerry and Andrea Ricci)

EMERGING MARKETS-Brazil's real bounces past weak GDP as Latam FX recovers

Dec 02 2021

* Brazilian economy shrinks in Q3 * Brazilian stocks stocks up 1.7% * Mexican peso jumps 1% By Ambar Warrick Dec 2 Latin American currencies recovered from more than one-year lows on Thursday, although sentiment remained fragile after data showed Brazil sank into a recession in the third quarter, and uncertainty over the Omicron coronavirus variant remained high. Brazil's real rose 0.6%, taking some support from expectations of improving demand for iron ore exports to China. Data showed the Brazilian economy, Latin America's largest, contracted 0.1% in the three months to September, amid surging inflation and a severe drought. Brazil's economic rebound from the worst of the COVID-19 pandemic has sputtered as inflation surged into double digits, forcing the central bank to raise borrowing costs aggressively. Brazilian stocks rose 1.7%, recovering from a 13-month low. Analysts flagged some positives for the economy going into 2022, particularly for sectors yet to fully recover from the pandemic. "We expect some of the still COVID impacted services sectors (in particular services to households) to recover further in coming months in tandem with further progress on the COVID vaccination program and renewed fiscal stimulus," analysts at Goldman Sachs wrote in a note. But they expect surging inflation and political uncertainty to weigh on economic activity in the coming months. Among other Latin American currencies, Mexico's peso jumped 1.1%, as it recovered from a more than one-year low hit last week. Mexican President Andres Manuel Lopez Obrador's pick for the next central bank head, Victoria Rodriguez, underlined her commitment to central bank independence, days after her nomination roiled markets amid concerns over political interference. Sentiment over Mexico's economy also remained fragile, after the central bank raised its inflation forecast and lowered its growth expectations for the year. The heightened inflation expectations put pressure on the central bank to hike interest rates further, which could benefit the peso in the short term. Most Latin American currencies have seen steep losses against the dollar since last week, as worries about the Omicron variant saw a wide move out of risk-driven assets. Broader emerging market currencies also recovered from recent losses on Thursday, although investors were awaiting more data on the COVID front. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1235.25 0.69 MSCI LatAm 2036.61 -0.19 Brazil Bovespa 102449.93 1.66 Mexico IPC - - Chile IPSA 4359.44 0.62 Argentina MerVal 86558.70 1.637 Colombia COLCAP 1420.14 0.13 Currencies Latest Daily % change Brazil real 5.6374 0.59 Mexico peso 21.2662 1.11 Chile peso 838.5 0.00 Colombia peso 3950.4 0.34 Peru sol 4.061 0.22 Argentina peso 101.0500 -0.03 (interbank) (Reporting by Ambar Warrick Editing by Frances Kerry)

CORRECTED-EMERGING MARKETS-Stocks extend recovery, Turkish lira leads FX losses

Dec 02 2021

* MSCI EM stocks index rises further from last week's 1-year low

World News