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EMERGING MARKETS-Brazil rate futures nearly flat after central bank report
March 30, 2017 / 4:01 PM / in 4 months

EMERGING MARKETS-Brazil rate futures nearly flat after central bank report

3 Min Read

    By Bruno Federowski
    SAO PAULO, March 30 (Reuters) - Yields paid on Brazilian
interest rate futures were barely changed on Thursday after the
central bank said it could accelerate rate cuts, all but
confirming market expectations of a 100 basis-point reduction
next month.
    In its quarterly inflation report, the central bank said
that slower inflation could allow it to step up the pace of rate
cuts and help pull the once-booming economy out of its worst
recession ever.
    Investors were already banking on a faster monetary
loosening, with yields on rate futures indicating a roughly 85
percent probability of a 100 basis-point decline in the central
bank's April 11-12 meeting.
    The bank cut the benchmark Selic overnight lending rate by
75 basis points in each of its last two policy meetings to 12.25
percent.
    The Brazilian real seesawed, in line with other Latin
American currencies.
    The Mexican peso touched a new five-month peak as
traders awaited a central bank decision later in the day which
is widely expected to increase the benchmark rate for a fifth
straight meeting.
    Still, investors largely expect the bank to reduce the pace
of hikes following the peso's recent rally.
    
    Key Latin American stock indexes and currencies at 1550 GMT:
 Stock indexes                                 daily %   YTD %
                                     Latest     change  change
 MSCI Emerging Markets                970.11     -0.18   12.71
 MSCI LatAm                          2661.71     -0.09   13.82
 Brazil Bovespa                     65372.35     -0.24    8.54
 Mexico IPC                         48774.09     -0.54    6.86
 Chile IPSA                          4830.36      -0.5   16.36
 Chile IGPA                         24167.26     -0.42   16.56
 Argentina MerVal                   20192.67     -0.05   19.36
 Colombia IGBC                      10198.82      0.45    0.70
 Venezuela IBC                      42621.40      0.66   34.43
                                                              
 Currencies                                    daily %   YTD %
                                                change  change
                                      Latest            
 Brazil real                          3.1208     -0.17    4.11
 Mexico peso                         18.6550      0.27   11.20
                                                        
 Chile peso                            663.1      0.02    1.15
 Colombia peso                       2875.27      0.11    4.39
 Peru sol                              3.244     -0.03    5.24
 Argentina peso (interbank)          15.3650      0.46    3.32
                                                        
 Argentina peso (parallel)             15.86      0.25    6.05
                                                        
 

 (Reporting by Bruno Federowski; Editing by Alistair Bell)
  

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