July 23 Emerging-market stocks rose on Tuesday amid expectations some of the world's major central banks would cut interest rates soon, while gains by the dollar weakened developing-world currencies. Central bankers in South Korea and South Africa cut rates last week. The Russian and Turkish central banks are expected to follow suit later this week.
July 22 Emerging-market assets fell on Monday as expectations dwindled for an aggressive interest-rate cut by the U.S. Federal Reserve, while the introduction in China of a Nasdaq-styled index pulled investment away from existing indices.
July 19 Emerging market shares rose on Friday and currencies touched a four-month high after comments from a top Federal Reserve official reinforced expectations of a U.S. interest rate cut this month, stoking demand for riskier assets.
July 18 Emerging-market shares fell on Thursday amid weak economic data from Japan and disappointing corporate results in the United States, the latest signs the U.S.-China trade conflict was unlikely to be resolved anytime soon.
By Agamoni Ghosh July 17 Latin American stock indices were subdued on Wednesday as a re-emergence of trade tensions between the United States and China kept investors on the sidelines, but a recovery in oil prices and a soft dollar lifted currencies in the region. MSCI's index of Latin American stocks fell 0.1% with heavy-weights Brazil and Mexico stocks making marginal moves. Sao Paulo-traded stocks flitted between positive and negative territory, while the real currency inched 0.2% higher as investors looked for more policy directions beyond the pension reforms. Brazilian President Jair Bolsonaro's administration, which has been looking to bring the country's fiscal deficit situation under control, said it was planning to unveil a stimulus package worth 63 billion reais ($16.8 billion), according to newspaper Valor Economico. What the package will entail and how much it will add to government's savings over and above the 900 billion reais ($240.10 billion) expected from the pension reform is not known yet. Mexican stocks slid 0.2% but telecom operator America Movil rose 3% after a surge in its second-quarter net profit on the back of foreign exchange gains. The peso which took a hit in the previous session after the government's new Pemex plan failed to impress investors managed to partly recover, moving 0.3% higher. "The markets are still giving it some benefit of the doubt at the moment but that could evaporate real soon," said Christian Lawrence, senior strategist, Latam FX, Rabobank. "There is really not much to be optimistic about the plan given the task at hand is huge and doesn't seem this plan will change anything for Pemex." Pemex, the world's most indebted oil company was downgraded by Fitch to speculative, or "junk," earlier this year while Moody's puts it at just one notch higher. A downgrade from Moody's would formally confirm Pemex as a junk credit. The Chilean peso and Colombian peso moved higher between 0.2% and 0.4%, while the Argentinian peso outperformed its Latin American peers. Key Latin American stock indexes and currencies at 1500 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1055.25 -0.48 MSCI LatAm 2933.83 0.02 Brazil Bovespa 103845.52 0.07 Mexico IPC 42910.81 -0.07 Chile IPSA 5070.34 -0.12 Argentina MerVal 41952.27 0.39 Colombia IGBC 13120.15 -0.1 Currencies daily % change Latest Brazil real 3.7647 0.15 Mexico peso 19.0375 0.25 Chile peso 681.8 -0.19 Colombia peso 3191.22 0.43 Peru sol 3.286 0.03 Argentina peso 42.4800 0.54 (interbank) (Reporting by Agamoni Ghosh in Bengaluru Editing by Alistair Bell)
July 17 Emerging-market shares fell on Wednesday as worries over the U.S.-China trade conflict resurfaced. Currencies in the developing world mostly weakened as the dollar gained.
By Agamoni Ghosh July 16 Latin American currencies were lower on Tuesday against a strong dollar, with Mexico's peso leading losses as investors tried to assess a new plan unveiled by the government for debt-laden oil firm Pemex, while equities in the region moved higher. The Mexican government will recapitalize Pemex and reduce its tax burden to help build a new refinery and raise production from onshore and shallow water fields, said Chief Executive Octavio Romero. Scanty details on how the government's new plan would help Pemex failed to excite markets, however, with the peso shedding 0.4%. Analysts have been concerned in the past over how the oil firm, which is the world's most indebted company, can be rescued without foreign investment - a proposition that President Andres Manuel Lopez Obrador has opposed. "Pemex's situation is quite similar to what South Africa is seeing with regard to Eskom. In terms of the sovereign, its(government-backed recapitalization) definitely a negative," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman. Pemex's credit was downgraded to junk by Fitch this year, while Moody's and S&P have the it on negative outwatch. Other currencies in the region, including Chile'sand Colombia's peso, slid as the dollar gained on the back of strong U.S. economic data. Brazil's real outperformed as optimism over the pension reform continued to boost sentiment. Stocks on the Bovespa moved 0.5% higher, led by gains in energy and financial companies. Intense discussion over amendments to the pension reform bill, a key to bringing the economy back on track, delayed the second round of voting to August. Markets however, have been mostly positive, viewing last week's vote of approval in the lower house as a first successful step to getting the reform passed and helping restore confidence in Brazil's economy. Stock indices in Chile and Colombia moved higher between 0.2% and 0.4%, but Mexico's IPC index fell marginally. Key Latin American stock indexes and currencies at 1440 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1060.69 0.28 MSCI LatAm 2942.99 0.04 Brazil Bovespa 104337.95 0.52 Mexico IPC 42968.60 -0.22 Chile IPSA 5076.43 0.16 Argentina MerVal 42156.01 2.18 Colombia IGBC 13055.86 0.21 Currencies daily % change Latest Brazil real 3.7607 -0.15 Mexico peso 19.0455 -0.39 Chile peso 680.5 0.00 Colombia peso 3200.52 -0.46 Peru sol 3.285 -0.06 Argentina peso 42.6500 -0.35 (interbank) (Reporting by Agamoni Ghosh in Bengaluru; Editing by Dan Grebler)
July 16 Emerging markets assets crept higher on Tuesday as investors stayed on the sidelines ahead of U.S. economic data that could provide clues for future monetary policy.
By Agamoni Ghosh July 15 Latin American markets had a tepid start on Monday with Brazilian assets subdued as economic worries eclipsed optimism from pensions reform hopes, while currencies in the region were mixed with Argentina's peso dropping on a Moody's outlook cut. The Sao Paulo index was flat while the real slid 0.3% lower. Economists cut their 2020 growth forecasts for Latin America's largest economy to a new low, despite Brazil's Congress delivering a major breakthrough on pension reform that most analysts say should boost business sentiment and activity. "There is little doubt that the economy remained weak in the second quarter and we still expect a flat Q2 reading," said Mauricio Oreng, senior Brazil strategist, Rabobank. Intense discussion over amendments to the pension reform bill, a key to bringing the economy back on track, delayed the second round of voting to August and reduced the projected savings to 900 billion reais ($240.10 billion) over from 1 trillion reais initially estimated. "A gradual improvement in activity can be seen from 19H2 onwards, on the heels of easier financial conditions (expected BCB rate cuts) and less negative economic sentiment (the approval of an effective pension reform)," Oreng said. Political uncertainty over upcoming reform plans in Brazil will continue to cast a shadow over the outlook of Latin America's biggest economy, a Reuters poll of analysts showed. Mexican stocks and the peso both climbed higher while Chile's peso gained ground on higher copper prices, the country's top export. Argentina's stocks as well as the peso underperformed its peers after ratings agency Moody's changed the economy's outlook to negative from stable over the weekend, citing rising uncertainty about economic policy and risk of additional "damaging currency shocks." Moody's decision comes a little more than three months before the country's presidential elections in which President Mauricio Macri, seeking a second term, is being challenged by Alberto Fernandez, who has former populist president Cristina Fernandez de Kirchner on his ticket. Key Latin American stock indexes and currencies at 1455 GMT Stock indexes daily % change Latest MSCI Emerging Markets 1057.69 0.65 MSCI LatAm 2950.54 0.35 Brazil Bovespa 104111.96 0.2 Mexico IPC 42928.09 0.66 Chile IPSA 5066.37 -0.04 Argentina MerVal 42643.08 -0.48 Colombia IGBC 13015.88 -0.13 Currencies daily % change Latest Brazil real 3.7494 -0.32 Mexico peso 18.9755 0.12 Chile peso 678.6 0.13 Colombia peso 3191.09 0.21 Peru sol 3.286 -0.09 Argentina peso 41.8500 -0.59 (interbank) (Reporting by Agamoni Ghosh in Bengaluru; Editing by Bill Trott)
July 15 Emerging-market shares rose on Monday as data from China helped to allay fears about the world's second-largest economy and a weaker dollar boosted most developing-world currencies.
Britain called on Monday for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, days after Iran seized a British-flagged tanker in what London described as an act of "state piracy" in the strategic waterway.