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Shreyashi Sanyal

EMERGING MARKETS-Brazil's real bounces; Mexican peso flat ahead of rate decision

10:15am EDT

* Real finds support in improving service sector data * Brazil's Bovespa rises on upbeat quarterly reports * Mexican peso rangebound ahead of expected rate cut By Shreyashi Sanyal Aug 13 Brazil's real bounced back on Thursday on signs of recovery in the country's battered service sector, while the Mexican peso traded in a tight range ahead of an expected interest rate cut by the central bank. The real rose 1.7%, rebounding from declines in the previous session, as figures showed services activity in Brazil increased in June for the first time in five months. The data showed service sector activity rising 5% in June, slowly recovering from a record slump triggered by the social isolation measures put in place to combat Brazil's coronavirus outbreak. Still, spiking COVID-19 cases, a dovish central bank and worsening ties between the United States and China have upped the pressure on the real recently, which has fallen 25.7% so far this year. Mexico's peso traded on either side of flat, as markets priced in a 50 basis-point cut in the Mexican central bank's key lending rate at the end of its meeting at 1800 GMT. "Banxico will try and avoid following some of the LatAm region into quantitative easing territory (Chile and Colombia) although given the underlying weakness in Mexico we cannot rule out future asset purchases completely," said Christian Lawrence, senior cross-asset strategist at Rabobank. Most currencies in Latin America remained largely flat against the dollar, with market participants watching for a meeting between the United States and China to discuss their Phase 1 trade deal over the weekend. The MSCI's index for Latin American equities rose 1.8%, with Sao Paulo stocks gaining 0.6% on encouraging quarterly earnings reports. Meat processor Marfrig Global Foods jumped 7% after reporting net profit of 1.59 billion reais ($294 million) in the second quarter on improving operating performance and firm demand from China. Via Varejo rose 5% after the electronics retailer posted a profit of 65 million reais ($12 million) in the second quarter, reversing a year-ago loss as the COVID-19 pandemic boosted online sales of electronics. Also on the radar, Argentina will formally submit its amended debt restructuring offer to the U.S. securities regulator as early as Thursday, two sources said, a key step in sealing a deal after an initial agreement was reached with creditors earlier this month. Peruvian President Martín Vizcarra on Wednesday banned family gatherings and extended lockdowns to five more regions of the country amid a fresh spike in pandemic cases. Key Latin American stock indexes and currencies at 1355 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1097.20 0.29 MSCI LatAm 2036.67 1.83 Brazil Bovespa 102770.33 0.64 Mexico IPC 38544.71 -0.23 Chile IPSA 4068.80 0.8 Argentina MerVal 0.00 0 Colombia COLCAP 1140.90 -0.08 Currencies Latest Daily % change Brazil real 5.3630 1.65 Mexico peso 22.2920 0.22 Chile peso 793.1 -0.08 Colombia peso 3759.64 -0.12 Peru sol 3.5678 -0.06 Argentina peso (interbank) 73.1000 -0.07 Argentina peso (parallel) 129 1.55 (Reporting by Shreyashi Sanyal in Bengaluru)

EMERGING MARKETS-Currencies higher on dollar decline, U.S.-China meeting awaited

4:22am EDT

Aug 13 Emerging market currencies firmed on Thursday, against a dollar that lost ground as hopes of more stimulus in the United States waned, while investors awaited a meeting between Washington and Beijing to discuss the Phase 1 trade deal over the weekend.

EMERGING MARKETS-Political noise weighs on Brazil's real; Chile plans lockdown easing

Aug 12 2020

* Brazil's privatization secretary resigns * Do not expect Brazil real to recover until next year - analyst * Mexican central bank policy decision awaited on Thursday * Colombia peso slips as country tops 400,000 coronavirus cases (Updates prices) By Shreyashi Sanyal and Susan Mathew Aug 12 Brazil's real fell on Wednesday, weighed by political uncertainty, while currencies of Mexico and Chile firmed as the dollar weakened on a stalemate over U.S. coronavirus relief aid. The real slumped 0.7%. Economy Minister Paulo Guedes on Tuesday said Brazil's privatization secretary, Salim Mattar, had stepped down, unhappy with the slow pace of privatizations so far. Guedes also announced the resignation of the secretary for de-bureaucratization, Paulo Uebel. That brought the number of Guedes' secretaries who have left the government in recent months to four. Last week Guedes had announced that Brazil would announce three or four large privatizations within the next 30-60 days. Data showed Brazil's retail sales ended the first half of the year on a strong footing, surging back to pre-crisis levels as the easing of lockdown measures continued. Investors have cheered signs of a recent pick-up in economic activity in Latin America's biggest economy but are now cautious on the real amid surging COVID-19 cases, a dovish central bank and worsening ties between the United States and China. "We do not expect the BRL to recover until next year, when the crisis has subsided and the markets price out the corona risk," said FX analysts at Commerzbank. Coronavirus cases continued to climb in South America, with Colombia topping 400,000 confirmed cases on Tuesday, as deaths climb toward 13,500. The Colombian peso fell 0.3% against the dollar. The dollar slid as U.S. Treasury Secretary Steven Mnuchin said the White House and top Democrats may not be able to reach a deal on coronavirus aid, in a fifth day without talks. The Mexican peso rose 0.4%. Investors await a central bank policy decision on Thursday with a 50 basis point cut in its key lending rate priced in. Chile's currency firmed as the country's plans to cautiously lift its lockdown on Santiago's central business district and adjoining Central Station on Monday. Among stocks indexes, Argentina's Merval sank 3.5% to post its worst day in six weeks, while Brazil's Bovespa slid 0.7%. Argentina will formally submit its amended debt restructuring offer to the U.S. securities regulator as early as Thursday, two sources said, after an initial agreement was reached with creditors earlier this month to restructure around $65 billion in foreign debt. Most other regional stock indexes were flat to higher. Key Latin American stock indexes and currencies at 1919 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1094.31 0.28 MSCI LatAm 1996.08 -0.69 Brazil Bovespa 101459.00 -0.7 Mexico IPC 38707.48 0.01 Chile IPSA 4031.14 0.77 Argentina MerVal 49207.11 -3.513 Colombia COLCAP 1139.21 0.42 Currencies Latest Daily % change Brazil real 5.4497 -0.66 Mexico peso 22.3398 0.21 Chile peso 792.5 0.00 Colombia peso 3755 -0.62 Peru sol 3.5658 -0.17 Argentina peso 73.0400 -0.05 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernadette Baum and Leslie Adler)

EMERGING MARKETS-Latam FX muted with focus on U.S. stimulus, Brazil's real weakens

Aug 12 2020

* Do not expect Brazil real to recover until next year - analyst * Bovespa up after retail sales surge back to pre-crisis levels * Mexican central bank policy decision awaited on Thursday * Colombia peso slips as country tops 400,000 coronavirus cases By Shreyashi Sanyal Aug 12 Most Latin American currencies traded in tight ranges on Wednesday, as investors questioned the likelihood of fresh stimulus in the United States, while the Brazilian real fell on growing doubts over its pace of recovery this year. The real fell 0.7% and has mostly remained weak since the Brazilian central bank cut interest rates one week ago. Investors have cheered signs of a recent pick up in economic activity in Latin America's biggest economy but are now cautious on the real amid surging COVID-19 cases, a dovish central bank and worsening ties between the United States and China. "The Banco Central do Brasil (BCB) has shown itself to be more dovish and has introduced forward guidance. Not only does this leave the back door open for further monetary easing, it also dampens expectations of rate hikes in the coming year," said FX analysts at Commerzbank. "We do not expect the BRL to recover until next year, when the crisis has subsided and the markets price out the corona risk." Even as Brazil amasses a record debt that has evoked memories of crises past in South America's largest economy, some economists say rock-bottom interest rates and low foreign debt mean the government can continue to spend its way out of recession. Most currencies in the region made sideways moves, with investors focusing on offshore events after U.S. Treasury Secretary Steven Mnuchin said the White House and top Democrats may not be able to reach a deal on coronavirus aid, in a fifth day without talks on the stalemate. Coronavirus cases continued to surge in South America, with Colombia topping 400,000 confirmed coronavirus cases on Tuesday, as deaths climb toward 13,500 and intensive care units in the capital Bogota remain near capacity. The Colombian peso fell 0.3% against the dollar. Mexico's peso was subdued with investors awaiting a central bank policy decision on Thursday. Markets are pricing in a 50 basis point cut in its key lending rate. Among stocks indexes, Brazil's Bovespa rose 0.8% after data showed retail sales ended the first half of the year on a strong footing, surging back to pre-crisis levels as the easing of lockdown measures continued across the country. Shares in Brazilian software firm Linx SA fell 4%, a day after card processor StoneCo said it would buy Linx in a $1.12 billion deal that will transform it into an integrated software and payments provider. Key Latin American stock indexes and currencies at 1426 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1092.09 0.08 MSCI LatAm 2004.38 -0.27 Brazil Bovespa 102321.69 0.14 Mexico IPC 38818.04 0.3 Chile IPSA 4031.30 0.78 Argentina MerVal 50312.54 -1.345 Colombia COLCAP 1138.04 0.32 Currencies Latest Daily % change Brazil real 5.4630 -0.90 Mexico peso 22.3737 0.05 Chile peso 793.8 -0.16 Colombia peso 3746.74 -0.40 Peru sol 3.5618 -0.06 Argentina peso (interbank) 73.0400 -0.05 Argentina peso (parallel) 128 2.34 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernadette Baum)

EMERGING MARKETS-Turkey's lira tumbles on worries of crisis as dollar firms

Aug 12 2020

Aug 12 The Turkish lira resumed its sharp fall on Wednesday on investor worries of a full-blown currency crisis and as a firm dollar made it more vulnerable to a squeeze, while emerging market stocks fell on doubts over coronavirus aid in the United States.

EMERGING MARKETS-Latam FX up against steady dollar; Upbeat economic data lifts Mexican peso

Aug 11 2020

(Updates prices) By Shreyashi Sanyal and Susan Mathew Aug 11 Mexico's peso rose on Tuesday after data showed industrial output rose in June in a sign of recovery following the coronavirus lockdown, while other Latin American currencies strengthened as the dollar held steady. The peso gained 0.3% as a rebound in manufacturing and construction saw Mexican industrial output rise 17.9% in June from May. But, "while production appears to have strengthened in July, further gains will probably be more muted," warned Capital Economics in a client note. Mexico's coronavirus death toll passed 53,000 on Monday as the government struggles to balance the need to curb the pandemic with re-opening Mexico's battered economy. Early in June, the country's Deputy Health Minister had said that a toll of 60,000 would be a "very catastrophic scenario." Brazil's real firmed as the dollar started to lose momentum as signs of an improving global market outlook saw investors betting on riskier currencies. Minutes from Brazil's latest central bank meeting showed interest rates are close to as low as they can go without destabilizing financial markets, meaning any further reductions will likely be gradual and spaced out over time. In Chile, after two days of losses that pushed its currency to one-month lows, the peso bounced 1.5% on Tuesday. Among shares, major regional stocks indexes were mixed, tracking choppy session on Wall Street. Mexican shares jumped 1% to scale two month highs. The index extended gains to a fifth straight session amid expectations of a 50 basis points cut in Mexico's key interest rate on Wednesday. Brazil shares slipped on a materials drag. Lender Banco BTG Pactual slipped slightly as its second-quarter recurring net income fell 4.1% on higher operating expenses. In Argentina, Economy Minister Martin Guzman said a new financing program with the International Monetary Fund is not likely until the beginning of next year. The Peruvian sol traded flat. Unrest in the country grew, causing mining and oil production disruptions, amid demand for more economic aid and healthcare support during the pandemic as a second wave of COVID-19 infections hits the country. Latin American stock indexes and currencies at 1941 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1091.80 0.49 MSCI LatAm 2013.15 -0.48 Brazil Bovespa 102369.36 -1.04 Mexico IPC 38666.75 0.98 Chile IPSA 4009.52 0.64 Argentina MerVal 51092.41 -2.086 Colombia COLCAP 1140.24 -0.29 Currencies Latest Daily % change Brazil real 5.4107 0.99 Mexico peso 22.4200 0.12 Chile peso 792.5 1.27 Colombia peso 3734.27 0.84 Peru sol 3.5597 0.00 Argentina peso 72.9900 -0.05 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; editing by Grant McCool and Nick Zieminski)

UK mid-caps hit two-month high on stimulus hopes

Aug 11 2020

The UK mid-caps index touched its highest level in two months on Tuesday as hopes of a stimulus-led rebound helped investors look past a mixed batch of quarterly earnings updates, while InterContinental Hotels rose after signalling a tentative recovery.

UPDATE 2-UK mid-caps hit two-month high on stimulus hopes

Aug 11 2020

* FTSE 100 up 1.6%, FTSE 250 up 1.5% (Adds comments, updates prices to close)

CORRECTED-EMERGING MARKETS-Mexican peso at one-week high; Latam currencies up on weak dollar

Aug 11 2020

(Corrects milestone to "one-week high" from "two-week high" in headline and paragraph 1) By Shreyashi Sanyal Aug 11 The Mexican peso jumped to its highest level in one week on Tuesday after data showed industrial output rose in June in a sign of recovery following the coronavirus lockdown, while other Latin American currencies strengthened against a weaker dollar. The peso gained 0.9% against the greenback on Mexican industrial output rising 17.9% in June from May led by a rebound in manufacturing and construction. Investors are awaiting the Mexican central bank's policy meeting, markets expecting an interest rate cut later this week to the lowest level in four years. "The consensus is for a 50bps rate cut, as the bank struggles to prop up the economy and keep the peso from deflating. Banxico officials have continued to provide contradicting signals about forthcoming bank policy, giving the market increased uncertainty," said analysts at Orbex Global. Brazil's real firmed against the dollar, with minutes from the latest central bank meeting showing Brazilian interest rates are close to as low as they can go without destabilizing financial markets, meaning any further reductions will likely be gradual and spaced out over time. The Chilean peso bounced from a one-month low it hit during the previous session. Signs of improvement in copper demand from China has helped support the currency. Stocks in the region followed Wall Street's strong open, with Chilean stocks rising the most in Latin America. Brazilian lender Banco BTG Pactual SA rose 1.8% even as its second-quarter recurring net income fell 4.1% to 987 million reais on higher operating expenses. More unrest hit Peru, as angry residents in Andean and Amazon regions have attacked three mining and oil sector firms in the last week, two of which were forced to halt operations after deadly clashes, as a second wave of COVID-19 infections hits the country. Latin American stock indexes and currencies at 1400 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1093.73 0.67 MSCI LatAm 2022.50 -0.02 Brazil Bovespa 104264.62 0.79 Mexico IPC 38786.48 1.3 Chile IPSA 4018.38 0.86 Argentina MerVal 0.00 0 Colombia COLCAP 1151.31 0.68 Currencies Latest Daily % change Brazil real 5.4571 0.13 Mexico peso 22.3774 0.31 Chile peso 796 0.83 Colombia peso 3746.25 0.51 Peru sol 3.5587 0.03 Argentina peso (interbank) 72.9900 -0.05 Argentina peso (parallel) 127 4.72 (Reporting by Shreyashi Sanyal in Bengaluru; editing by Grant McCool)

EMERGING MARKETS-Stocks rise on hopes of growth, Turkish lira finds support

Aug 11 2020

* China auto sales surge in July, log fourth straight monthly gain

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