European shares recovered some ground on Friday after a bruising session a day earlier, as President Donald Trump predicted a swift end to the damaging U.S. trade war with China.
By Agamoni Ghosh May 17 Latin American currencies fell to near five-month lows on Friday, wiping out their 2019 gains as the protracted trade war between the United States and China took its toll on riskier assets and a biting recession and high inflation hit Argentina's peso. MSCI's index of Latin American currencies was on track to record their fifth week of losses as trade headlines continued to hammer emerging market currencies. The week brought retaliation from both the United States and China, including Beijing imposing higher tariffs on most U.S. imports and President Donald Trump blocking China's Huawei Technologies from buying vital American technology. The Communist Party's People's Daily used a front page commentary on Friday to evoke the patriotic spirit of past wars, saying the trade spat would never bring China down. "We continue to see the near-term risks for EM tilted to the downside, and the risk of additional tariffs being implemented is rising," Morgan Stanley analysts said in a note. Brazil's real led losses among currencies in the region on dour economic forecasts and deepening uncertainty over the government's ability to get its flagship pension reform bill through. Central bank President Roberto Campos Neto acknowledged on Thursday that the economy may have contracted slightly in the first quarter and that controlling inflation hinged on the approval and implementation of fiscal reforms. Sao Paulo-traded stocks, which fell almost 2% in the previous session, managed to claw back into positive territory, helped by financial stocks and Vale. Mexican stocks were marginally higher, while the peso shed 0.3% a day after the central bank left borrowing costs steady, citing possible pressure on the currency's exchange rate as a risk for inflation to quicken. Chile's peso fell to its lowest levels this year, tracking a dip in the price of copper, the country's top export. Argentina's peso slipped 0.4% in early trade. The peso has slid almost 17% this year, hammered by a biting recession and high inflation, cranking up the challenge facing President Mauricio Macri's government ahead of elections in October. Key Latin American stock indexes and currencies at 1415 GMT Stock indexes daily % Latest change MSCI Emerging Markets 996.72 -1.43 MSCI LatAm 2528.15 -0.97 Brazil Bovespa 90372.32 0.39 Mexico IPC 43493.35 0.12 Chile IPSA 4956.52 -0.43 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 4.0823 -1.13 Mexico peso 19.1641 -0.23 Chile peso 697.2 -0.50 Colombia peso 3308.86 -0.34 Peru sol 3.324 -0.21 Argentina peso 45.0400 -0.53 (interbank) (Reporting by Agamoni Ghosh; Editing by Dan Grebler)
May 17 Emerging market currencies hit their lowest level in 2019 on Friday as trade friction between the United States and China continued to take its toll on riskier assets.
* China says tariffs on U.S. goods effective June 1 * Trade fears wipe out EM currency index gains for 2019 * Chilean stocks fall to lowest since December 2017 * Mexico's peso outperforms regional peers By Agamoni Ghosh May 13 Latin American currencies and stocks fell on Monday after China said it will impose higher tariffs on a range of U.S. goods in response to U.S. President Donald Trump hiking tariffs on $200 billion worth of Chinese goods. MSCI's index of Latin American stocks fell nearly 2% after Beijing struck back. Currencies in the region also followed suit, with MSCI's emerging market currency index wiping out all of its 2019 gains on Monday as the tariff re-escalation rattled global markets. Brazil's benchmark Bovespa index slumped more than 2%, led by losses in the financial sector, while the real currency slipped about 1% to near its lowest since October 2018. Brazil's domestic outlook continued to darken, with the central bank's weekly survey of nearly 100 financial institutions showing the median 2019 growth forecast was trimmed further to 1.45%. That is the bleakest outlook so far this year. Mexican stocks fell about 1% while the peso outperformed their regional peers. Investors closely watched developments related to Pemex as the government announced measures to help the state oil company, including renewing credit lines with JP Morgan, HSBC and Mizuho, as well as a gradual tax reduction for the firm. Cash-strapped Pemex has the largest debt among all state oil firms in Latin America. Chile's peso fell over 1%, tracking a dip in the price of copper, the country's top export, while stocks on the IPSA index fell to their lowest since December 2017. Asset managers JP Morgan and UBS have reduced their exposure to emerging market assets in recent days, while Citi said its clients made record outflows on emerging market FX for a third straight week. Key Latin American stock indexes and currencies at 1425 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1016.23 -1.67 7.02 MSCI LatAm 2593.60 -2.36 3.52 Brazil Bovespa 92375.14 -2 5.11 Mexico IPC 42565.65 -1.88 2.22 Chile IPSA 4994.74 -1.11 -1.11 Argentina MerVal 32541.56 -2.55 7.42 Colombia IGBC 12517.16 -1.14 12.32 Currencies daily % YTD % change change Latest Brazil real 3.9910 -1.19 -16.98 Mexico peso 19.1675 -0.38 2.77 Chile peso 694.1 -1.24 -11.45 Colombia peso 3294.08 -0.67 -9.47 Peru sol 3.328 -0.39 -2.73 Argentina peso 45.5500 -1.43 -59.17 (interbank) (Reporting by Agamoni Ghosh; Editing by Jeffrey Benkoe)
May 13 Chinese shares pulled emerging-market stocks lower on Monday after hopes for an end to a trade war between the United States and China were dashed. MSCI's index for emerging-market stocks fell over half a percent hovering around three-month lows.
By Agamoni Ghosh May 10 Latin American stocks slid on Friday as investor sentiment remained fragile over uncertainty related to the U.S.-China trade deal, while currencies were mixed in the region. Global equities started the day on a strong note as investors looked past increased U.S. tariffs on $200 billion worth of Chinese goods and focused on hopes for a trade deal between the United States and China. U.S. markets however, opened lower after President Donald Trump said he was in "absolutely no rush" to finalize a trade agreement with China. MSCI's index of Latin American stocks slid about 0.5% on the trade-related jitters and weakness in Brazil's Bovespa which came on the back of some disappointing earnings. Index heavyweight Vale, the world's biggest producer of iron ore, slid after posting a $1.6 billion loss in the first quarter as the company reels from a deadly dam disaster. BRF, the world's largest chicken exporter, slid 2.5% after the company said it lost money for the third consecutive quarter grappling with higher feed costs and trade restrictions in key markets such as Saudi Arabia. Mexican stocks fell about 1% while the peso snapped a four-day losing streak. Investors closely watched developments related to Pemex after President Andres Manuel Lopez Obrador said the state-oil firm will oversee construction of a new refinery, dismissing private sector suitors for the project. The announcement fueled fresh doubts about the financial health of the cash-strapped firm which has the largest debt among all state oil firms in Latin America. Chile's peso was marginally higher a day after its central bank held benchmark interest rate steady in line with market expectations. UBS Wealth Management cut its exposure to emerging market stocks and bonds late on Thursday, changing its portfolio as an intensification of China-U.S. trade tensions bruised markets. Key Latin American stock indexes and currencies at 1445 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1030.80 0.23 6.5 MSCI LatAm 2626.66 -1.11 3.51 Brazil Bovespa 93387.75 -1.5 6.26 Mexico IPC 42740.61 -1.05 2.64 Chile IPSA 5017.08 -0.56 -0.56 Argentina MerVal 34433.23 0.92 13.67 Colombia IGBC 12554.54 -0.17 12.66 Currencies daily % YTD % change change Latest Brazil real 3.9679 -0.39 -16.50 Mexico peso 19.1631 0.33 2.80 Chile peso 685 0.07 -10.27 Colombia peso 3277.45 -0.09 -9.01 Peru sol 3.315 -0.06 -2.35 Argentina peso 44.9300 0.82 -58.60 (interbank) (Reporting by Agamoni Ghosh Editing by Phil Berlowitz)
May 10 Emerging-market shares and currencies gained on Friday as renewed hope for progress in trade talks between the United States and China overshadowed an increase in tariffs for Chinese goods.
May 9 Emerging-market stocks slumped to two-month lows on Thursday as hopes dwindled for a trade deal between the United States and China. Currencies in the developing world also slid.
By Agamoni Ghosh May 8 Latin American currencies, benefiting from a soft dollar, rose on Wednesday on growing concerns about the escalating trade dispute between China and the United States, while stocks in Brazil gained. U.S. President Donald Trump confirmed through a tweet on Wednesday that Chinese officials were coming to Washington to work out a deal and possibly end a lengthy trade disagreement between the world's largest economies. Caution, however, remained as the president warned that if a deal was not finalized, tariffs $200 billion of Chinese goods would rise beginning on Friday. Brazil's real led gains among currencies. Data showed inflation in Brazil as measured by the IGP-DI price index rose 0.90 percent in April, compared with a 1.07 percent gain in March. Chile's peso rose marginally but Mexico's peso slid as oil prices moved lower on U.S.-Chinese trade jitters. MSCI's index of Latin American stocks rose more than 1 percent, outperforming the overall emerging markets index, which slipped about half a percent. Sao Paulo-traded stocks rose 1.5 percent after two straight sessions of losses. Brazilian steelmaker Gerdau was among the top gainers after the company said it expected the Brazilian economy to recover and demand for construction steel in the United States to grow in 2019. Echoing a similar positive sentiment, Moody's said on Wednesday that stronger fundamentals have helped trim liquidity risk for most Brazilian sectors. Preferred shares of gun maker Taurus rose 14 percent after Brazilian President Jair Bolsonaro signed a decree easing access to guns and ammunition. Vale was among the few weak spots after it reported a slump in its iron ore production for the first quarter, reflecting the impact of the deadly collapse of a tailings dam at Brumadinho in late January. Mexican stocks dropped 0.3 percent, while Chile's IPSA index fell about half a percent, dragged lower by lithium producer Sociedad Quimica y Minera. Key Latin American stock indexes and currencies at 1430 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1050.37 -0.63 9.46 MSCI LatAm 2708.47 1.68 3.81 Brazil Bovespa 95949.13 1.65 9.17 Mexico IPC 43569.59 -0.03 4.63 Chile IPSA 5048.95 -0.58 -0.58 Argentina MerVal 33332.38 1.81 10.03 Colombia IGBC 12469.97 0.29 11.90 Currencies daily % YTD % change change Latest Brazil real 3.9329 0.90 -15.75 Mexico peso 19.0802 -0.25 3.24 Chile peso 684.6 0.03 -10.22 Colombia peso 3281.8 0.51 -9.14 Peru sol 3.315 -0.06 -2.35 Argentina peso 44.9100 0.87 -58.58 (interbank) (Reporting by Agamoni Ghosh)
May 8 Emerging market shares hit a 40-day low on Wednesday as investors fretted about U.S.-China trade tensions, but a retreat in the dollar helped most developing world currencies stay afloat.
Three years ago, when Iran's military captured 10 U.S. sailors after they mistakenly strayed into Iranian waters, U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif jumped on the phone in minutes and worked out the sailors' release in hours.