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Aaron Saldanha

REFILE-EMERGING MARKETS-Latam stocks mostly rise, Mexican shares fall

11 Dec 2018

(Refiles to include dropped word 'fall' at end of headline) By Aaron Saldanha Dec 11 Most Latin American stocks rose on Tuesday, taking heart from a perceived thaw in the U.S.-China trade war, but cautious sentiment toward Mexico in the run-up to the presentation of its budget pushed Mexican shares lower. Market participants viewed a report that China is moving to cut import tariffs on American-made cars as a sign the world's second largest economy is ready to make concessions on trade. MSCI's index tracking Latin America stocks rose 0.7 percent while its index of Latin America currencies gained about half a percent. "It is very hard to predict what's going to happen with trade," said Alejo Czerwonko, emerging markets strategist at UBS Global Wealth Management's Chief Investment Office, adding that an easing of trade tensions should see Brazil's real benefit. The real firmed 0.4 percent against the dollar, while Brazil's stocks benchmark rose 0.6 percent, as most sectors gained. Centrais Eletricas Brasileiras (Electrobras) clocked its highest closing level in nearly two weeks. The utility said an injunction obtained by labor unions to suspend the effects of a privatization auction of its distribution unit in Amazonas will not invalidate the result of the bidding. Investor sentiment towards Mexican assets was dim, ahead of the delivery of the new government's budget to be presented on Saturday. Mexican stocks recorded a third straight losing session, falling 1.2 percent on Tuesday. Mexico's energy regulator canceled two oil field auctions scheduled for February, after the new leftist government said it would not hand over more resources to private firms until they proved themselves as producers. "It goes back to our baseline scenario - a more challenging institutional setup, a more challenging regulatory setup, larger state intervention in the economy, the use of quasi-sovereign firms as an instrument of policy with disregard for profitability," UBS' Czerwonko said. "We don't think this bodes well for Mexican assets over time." Mexico's peso firmed half a percent, however, helped by better market sentiment towards U.S.-China trade relations. Chile's peso weakened to its lowest closing level in nearly a month, as the benefits arising from higher prices of key export copper were offset by lower currency purchases by institutional funds. Latin American stock indexes and currencies at 2129 GMT Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 964.80 0.21 -16.72 MSCI LatAm 2521.08 0.65 -10.86 Brazil Bovespa 86419.57 0.59 13.11 Mexico IPC 40841.76 -1.24 -17.25 Chile IPSA 5071.74 0.73 0.73 Argentina MerVal 30941.09 0.61 2.91 Colombia IGBC 11654.81 -0.48 2.50 Currencies Latest Daily YTD pct pct change change Brazil real 3.9003 0.49 -15.05 Mexico peso 20.2090 0.45 -2.52 Chile peso 682.9 -0.73 -9.99 Colombia peso 3183.17 0.21 -6.32 Peru sol 3.36 0.24 -3.66 Argentina peso (interbank) 37.8000 -0.26 -50.79 (Reporting by Aaron Saldanha in Bengaluru; editing by Grant McCool)

EMERGING MARKETS-Latam stocks slide, currencies weaken against firm dollar

10 Dec 2018

(Rewrites with updated prices, adds FX strategist's quote) By Aaron Saldanha Dec 10 Latin American stocks started the week sliding to two-week closing lows, hurt by concerns about the U.S.-China trade war's toll on global growth, while a firm dollar pushed Latin American currencies down. China, an important destination for Brazil's resource exports, reported far weaker-than-expected November exports and imports, showing slower global and domestic demand. Meanwhile, uncertainty related to Brexit supported broad dollar strength. Mazen Issa, a senior FX Strategist with TD Securities, said that China's "disappointing trade figures" triggered global growth concerns. China's rising trade surplus with the United States would undermine U.S. President Donald Trump's "optics of a trade deal," Issa said. MSCI's index tracking Latin America stocks slid 3.3 percent for its worst one-day performance in two months. Its index of Latin America currencies wilted 1.4 percent against the strong dollar. Brazil's stocks benchmark dropped 2.5 percent to post its third straight losing session, with weakness across the board taking its toll. Brazilian energy stocks fell as global oil prices slid on demand growth concerns, with Petroleo Brasileiro SA's ordinary shares and preferred shares both among the benchmark's top four percentage losers. Brazil's real weakened 0.3 percent. The central bank of Latin America's top economy is due to hold a meeting on Tuesday and Wednesday, where analysts expect the key rate to be left unchanged - at multi-year lows of 6.50 percent. "The inflation from the focus survey for 2019 is now below the midpoint of the target. This allows the central bank to remain on hold for longer," wrote Citigroup Head of Emerging Market Strategy Dirk Willer and Emerging Markets FX Strategist Kenneth Lam in a note. Mexico's stocks fell 1.2 percent loss, the worst one-day fall in two weeks, while its peso slipped 0.1 percent. Mexico's new government is due to deliver its budget by Saturday, with investors remaining watchful. A string of perceived policy missteps such as the scrapping an already begun airport project and proposals regarding mining and banking commissions have jolted investor sentiment. Colombia's peso weakened 1.4 percent, more than the 1.2 percent drop seen in local stocks. Argentina's main equity index slid 2.5 percent, while its peso weakened about 0.8 percent. Chile's peso slipped to follow falling prices of copper, the country's top export. Latin American stock indexes and currencies at 2137 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 962.79 -1.89 -16.89 MSCI LatAm 2504.90 -3.31 -11.43 Brazil Bovespa 85914.71 -2.5 12.45 Mexico IPC 41356.04 -1.23 -16.21 Chile IPSA 5035.00 -1.17 -1.17 Argentina MerVal 30753.54 -2.53 2.29 Colombia IGBC 11710.70 -1.2 2.99 Currencies daily % YTD % change change Latest Brazil real 3.9174 -0.02 -15.42 Mexico peso 20.2922 -0.17 -2.92 Chile peso 677.9 -0.46 -9.33 Colombia peso 3189.8 -1.40 -6.51 Peru sol 3.368 0.03 -3.89 Argentina peso 37.6600 -0.56 -50.61 (interbank) (Reporting by Aaron Saldanha in Bengaluru; editing by Grant McCool)

EMERGING MARKETS-Most Latam currencies firm against a soft dollar; Brazil stocks rise

07 Dec 2018

By Agamoni Ghosh and Aaron Saldanha Dec 7 Most Latin American currencies firmed on Friday against a dollar rendered softer by U.S. jobs data, but Brazil's real was on course for a fourth straight losing day, hurt as outflows from the country exacted their toll. The greenback incurred a loss against a basket of currencies as data showed U.S. job growth in November slowed - suggesting some moderation in economic activity. Capital has been drawn away from emerging markets this year, due in no small part to rising U.S. interest rates increasing dollar assets' attractiveness. Friday's data comes after an inversion in part of the U.S. Treasury yield curve earlier this week fed investor worries about slowing global growth and a possible U.S. recession on the horizon. In Latin America, Brazil's real fell 0.2 percent as outflows took their toll. José Carlos Amado, a trader with brokerage Spinelli, attributed the real's weakness to outflows on the back of uncertainty overseas and low interest rates. Analysts and traders broadly expect Brazilian benchmark borrowing costs to be left at the record low of 6.5 percent at the central bank's Dec. 11-12 policy meeting, wrote Mauricio Oreng, senior Brazil strategist with Rabobank in a note, adding he felt the same way. The Bovespa stock index rose 0.9 percent led by the energy sector as global oil prices rose 5 percent with Russia and the major Middle East producers in OPEC edging closer to a deal to cut output.. State-controlled oil firm Petroleo Brasileiro SA gained about 3.1 percent, making it among the top gainers on the Bovespa. State-owned energy utility Centrais Eletricas Brasileiras SA (Eletrobras) led index gains with a 4.6 percent rise. Brazil's incoming mines and energy minister said he had not yet made up his mind on the privatization of Eletrobras, proposed under the current administration of President Michel Temer. Mexico's peso, more exposed than many of its Latin American peers to global trade, came off its lowest closing level in almost six months clocked on Thursday to firm half a percent. U.S. President Donald Trump sounded an optimistic note about negotiations with China on trade issues in an early morning tweet. The Colombian peso climbed 1 percent on Friday, on pace to post its best weekly performance since Aug. 24. Chile's peso was half a percent firmer, supported by a significant gain in the price of copper, the country's main export. Key Latin American stock indexes and currencies at 1420 GMT Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 983.33 0.45 -15.5 MSCI LatAm 2609.63 1.48 -9.07 Brazil Bovespa 89637.96 0.89 17.32 Mexico IPC - - - Chile IPSA 5148.10 0.53 0.53 Argentina MerVal - - - Colombia IGBC - - - Currencies daily % YTD % change change Latest Brazil real 3.8840 -0.28 -14.69 Mexico peso 20.2425 0.52 -2.68 Chile peso 671.6 0.50 -8.48 Colombia peso 3149.9 1.08 -5.33 Peru sol 3.366 0.24 -3.83 Argentina peso (interbank) 37.4200 0.88 -50.29 (Reporting by Agamoni Ghosh and Aaron Saldanha ; Additional reporting by Claudia Violante in Sao Paulo)

EMERGING MARKETS-Emerging markets shares set to end week lower, trade concerns weigh

07 Dec 2018

Dec 7 Emerging markets shares snapped a three-day losing streak on Friday, taking a breather after a sharp-sell off triggered by fresh worries over trade relations between the United States and China.

EMERGING MARKETS-Global sell-off spreads to Latin America; Mexican peso hits 5-month low

06 Dec 2018

By Aaron Saldanha and Agamoni Ghosh Dec 6 Latin American stocks and currencies were swept up in a global sell-off on Thursday as weak sentiment prevailed after the arrest of a top executive of Chinese tech giant Huawei sparked fresh concerns about the U.S.-China trade war. The arrest of Huawei Chief Financial Officer Meng Wanzhou, who is the daughter of the firm's founder, roiled global markets as Washington and Beijing prepare for crucial trade negotiations. "It's negative for China...if it's negative for China, it's also (negative) for emerging countries," said Fernanda Consorte, an exchange strategist with Brazil-based Ourinvest Bank, noting the potential fallout on exports from Brazil, Latin America's top economy. MSCI's index of Latin America stocks tumbled 1.9 percent, set for its worst one-day performance in 1-1/2 weeks. Its Latin America currencies index was down 0.6 percent. Mexico's peso, considered to be a weathervane of trade sentiment, fell half a percent and plumbed a more than five-month low while Brazil's real softened 1.5 percent. Mexico's peso is likely to bounce back from recent declines but by a smaller amount than previously expected, a Reuters Poll found, underscoring strategists' growing concerns about new President Andrés Manuel López Obrador's management of the country's economy. Lopez Obrador said on Wednesday he would not cancel contracts issued to foreign and national oil firms by his predecessor but challenged them to pump oil quickly or no further fields would be offered. A broad-based, 1 percent decline in Brazil's Bovespa index was driven by the energy sector. Global oil prices were hit by the Organisation of the Petroleum Exporting Countries signalling it may agree to a smaller output cut than expected. State-controlled oil firm Petroleo Brasileiro SA (Petrobras) lost 2.6 percent to lead losses on the Bovespa index , with the firm's preferred and common shares accounting for nearly 300 points of the Bovespa's 954-point drop. Brazilian antitrust watchdog Cade will begin an investigation on Wednesday that may result in mandatory sales of refineries by Petrobras. Mining giant Vale SA slid 1.7 percent, hurt by worries over U.S.-China trade, following its basic resources peers in Europe. Chile's peso started the day with a sharp drop against the dollar aided by a slide in the price of copper - the country's main export. Key Latin American stock indexes and currencies at 1401 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 978.42 -2.34 -13.51 MSCI LatAm 2548.65 -1.91 -8.12 Brazil Bovespa 88113.62 -1.04 15.33 Mexico IPC - - - Chile IPSA 5098.64 -0.84 -0.84 Argentina MerVal - - - Colombia IGBC - - Currencies daily % YTD % change change Latest Brazil real 3.9253 -1.47 -15.59 Mexico peso 20.6080 -0.55 -4.41 Chile peso 677.81 -0.81 -9.32 Colombia peso 3184.15 -0.89 -6.35 Peru sol 3.382 -0.15 -4.29 Argentina peso 38.0500 -1.42 -51.12 (interbank) (Reporting by Agamoni Ghosh and Aaron Saldanha in Bengaluru Additional reporting by Claudia Violante Editing by Frances Kerry)

EMERGING MARKETS-Emerging market shares fall as Asian tech stocks tumble post Huawei CFO arrest

06 Dec 2018

Dec 6 Emerging markets shares were on track to post their worst day in three-weeks on Thursday, as Asian shares tumbled after the arrest of an executive of Chinese tech giant Huawei at the request of the United States.

EMERGING MARKETS-Emerging market stocks slide, currencies slip against firmer dollar

05 Dec 2018

Dec 5 Emerging market stocks were on track for their steepest one-day fall in two weeks on Wednesday, following Tuesday's decidedly negative lead from Wall Street, while most emerging market currencies clocked losses against a slightly firmer dollar.

EMERGING MARKETS-Brazil stocks gain; real firms as U.S. dollar weakens

04 Dec 2018

By Agamoni Ghosh and Aaron Saldanha Dec 4 Brazil's real firmed against a soft dollar on Tuesday, as a flattening U.S. Treasury yield curve made investors worried about a possible recession in the world's top economy. As Treasury yields slid, Brazilian brokerage H. Commcor said the dollar was weakening on sentiment that the Fed would be more cautious about raising U.S. interest rates. U.S. Treasury yields have fallen steadily since the U.S. Federal Reserve suggested late last week that it may be nearing an end to its three-year rate hike cycle. The real firmed 0.2 percent, with the country's local stocks benchmark edging up about 0.3 percent, helped by gains in most sectors. The index is on track to close the day at a record closing high. Mexico's peso weakened 0.6 percent. Some investors were not fully convinced by a government proposal on Monday to buy back some debt tied to a canceled airport project. New President Andres Manuel Lopez Obrador, who had campaigned as a leftist, had said Mexico would buy back some of the debt used to fund the partly built airport, which he had said was tainted by corruption. His administration's move to cancel the project in October after a public consultation had triggered a sell-off in the peso and local stocks. RBC analysts said in a note that markets realized Monday's announcement does not mean the cancellation will be reversed, an idea floating among some local media outlets shortly after the news came out. Meanwhile, Colombia's peso firmed 0.4 percent while Argentina's peso weakened in early trade. Key Latin American stock indexes and currencies at 1425 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1017.30 0.04 -12.22 MSCI LatAm 2635.20 -0.25 -6.59 Brazil Bovespa 90121.09 0.34 17.96 Mexico IPC - - - Chile IPSA 5157.31 0.11 0.11 Argentina MerVal 32064.67 0.55 6.65 Colombia IGBC - - - Currencies daily % YTD % change change Latest Brazil real 3.8353 0.17 -13.61 Mexico peso 20.4700 -0.57 -3.77 Chile peso 670.05 -0.19 -8.27 Colombia peso 3173.98 0.41 -6.05 Peru sol 3.386 -0.15 -4.40 Argentina peso (interbank) 36.8200 -0.76 -49.48 (Reporting by Agamoni Ghosh and Aaron Saldanha in Bengaluru, Additional reporting by Claudia Violante in Sao Paulo; Editing by David Gregorio)

EMERGING MARKETS-Emerging market currencies gain against weak dollar; shares steady

04 Dec 2018

Dec 4 Emerging market currencies gained against a soft dollar on Tuesday as U.S. Treasury yields slipped, while developing world shares steadied as a rally after the U.S.-China trade truce petered out.

EMERGING MARKETS-Latam currencies, stocks slide as global growth concerns weigh

23 Nov 2018

(Recasts, updates prices, adds quote) By Aaron Saldanha Nov 23 Latin American currencies and stocks ended lower for both the day and the week on Friday, hurt by weakness in heavyweight Brazil, as they tracked global peers lower amid concerns about slowing world growth. MSCI's index of Latin American currencies fell 0.3 percent on the day against the dollar, which firmed as global risk appetite waned and investors sought the greenback's stability. The MSCI index of stocks in Latin America fell every day this week, sliding 1.3 percent on Friday to notch a 4.1 percent weekly loss - its worst since around mid-August. A Brazil-based derivative manager at a brokerage firm pegged a 0.6 percent weakening of the real to investors raising their long positions on the dollar due to external cues. Stocks in resource-rich Brazil logged a 1.4 percent decline, with materials and energy stocks - especially sensitive to slowing economic growth - dragging down the benchmark the most. Iron ore miner Vale SA sank 6.8 percent to record its worst one-day performance since March 2017. Iron ore prices in China, a key destination for Brazil's resource exports, tumbled. State-controlled oil firm Petroleo Brasileiro SA tumbled 3.1 percent, as global oil prices dropped sharply. Mexican stocks fell 0.3 percent to mark a more than two-and-a-half-year closing low while the peso softened half a percent. The currency ended the week lower for an eighth straight week. It has shed about 8.2 percent over the course of roughly two months, hurt in no small part by perceived recent policy missteps by President-elect Andres Manuel Lopez Obrador's administration. The scrapping of a partially built airport following a public consultation and lawmakers' proposals on certain banking commissions and mining have hurt sentiment toward Latin America's second largest economy in the past month. Investors are watchful for a similar consultation that Lopez Obrador's administration has scheduled for this weekend, with the public set to weigh in on topics such as a new railway line and an oil refinery. Argentina's peso weakened about 3.1 percent with local traders attributing the move to dollar-demand to hedge private investors' portfolios amid surplus peso liquidity. Key Latin American stock indexes and currencies at 2142 GMT Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 969.17 -0.7 -16.34 MSCI LatAm 2557.64 -1.34 -9.56 Brazil Bovespa 86230.22 -1.43 12.86 Mexico IPC 41144.33 -0.31 -16.63 Chile IPSA 5140.74 0.46 0.46 Argentina MerVal 30723.48 1.48 2.19 Colombia IGBC 11902.79 -1.36 4.68 Currencies daily % YTD % change change Latest Brazil real 3.8272 -0.14 -13.43 Mexico peso 20.4021 -0.46 -3.45 Chile peso 675.5 -1.04 -9.01 Colombia peso 3225.75 -1.19 -7.56 Peru sol 3.378 -0.18 -4.17 Argentina peso (interbank) 37.4000 -2.54 -50.27 Argentina peso (parallel) 36.5 -2.05 -47.32 (Reporting by Aaron Saldanha in Bengaluru Editing by Leslie Adler)

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