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Sruthi Shankar

EMERGING MARKETS-EM stocks, currencies supported by depressed dollar

26 Nov 2020

Nov 26 Emerging market stocks resumed gains on Thursday, while currencies firmed as the dollar lost more ground in the wake of downbeat U.S. economic data.

EMERGING MARKETS-Chile's peso outpaces Latam FX as copper prices spike

25 Nov 2020

* Copper prices hit 7-year peak * Real firms for a second day * Mexican peso muted after dismal growth forecast (Adds details, updates prices) By Sruthi Shankar and Ambar Warrick Nov 25 A spike in copper prices saw Chile's peso outperforming Latin American currencies on Wednesday, while most other regional stocks and units continued to grind higher on optimism over a coronavirus vaccine. The peso jumped 1.2% to the dollar and was set for its best day in more than one month. Prices of copper, Chile's top export, reached a seven-year peak on expectations of strong demand from major buyer China. A pickup in Chinese industrial activity has improved the outlook for commodity demand, spurring gains in oil and metal prices. The Colombian peso gained 0.5% as oil prices rose. But gains in oil exporter Mexico's currency were held back after the central bank revised down its outlook for 2021 economic growth, but also tempered its most pessimistic views about growth this year despite the damage from the pandemic. Investors have rushed to riskier emerging market assets in recent weeks after positive data on COVID-19 vaccine efficacy and signs of stability in U.S. politics. But the economic ructions from the outbreak continue to be felt. Growing infection rates in the Americas also raised concerns over possible new lockdown measures to curb the spread of the novel coronavirus. Brazil's real firmed for a second session, rising about 1%after figures showed the country's current account deficit narrowed to its smallest in 2-1/2 years in October, helped by a bigger-than-expected surplus in goods trade. Worries about Brazil's fiscal health, record-low interest rates and a second wave of coronavirus cases have hammered the real this year, but a brighter global mood has boosted the currency by more than 7% in November. "While there has been already very strong positive news flow surrounding the vaccine, we do not believe that the vaccine trade is already done yet," Citi's Dirk Willer said in a note. "Pullbacks, maybe related to month end equity selling, should be seen as a buying opportunity." Stocks in the region edged higher, with Brazil's Bovespa index adding about 0.4%. A Reuters poll showed Brazilian stocks will reach pre-pandemic levels by the middle of next year, but concern about the impact of a resurgent pandemic could limit the recovery. Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1218.94 -0.58 MSCI LatAm 2243.12 0.74 Brazil Bovespa 110352.93 0.52 Mexico IPC 42319.68 -0.98 Chile IPSA 4135.16 -1.48 Argentina MerVal 54238.77 0.19 Colombia COLCAP 1264.24 -0.5 Currencies Latest Daily % change Brazil real 5.3212 1.00 Mexico peso 19.9730 0.13 Chile peso 764.4 1.18 Colombia peso 3615.7 0.51 Peru sol 3.603 0.17 Argentina peso 80.7900 -0.11 (interbank) (Reporting by Sruthi Shankar and Ambar Warrick in Bengaluru; editing by Jonathan Oatis and Grant McCool)

EMERGING MARKETS-Brazil's real jumps 1%, Latam stocks subdued after rally

25 Nov 2020

* Real firms for a second day * Copper surge supports Chile's peso * Mexican peso eases from 9-month high By Sruthi Shankar Nov 25 Brazil's real jumped again on Wednesday, outperforming its Latin American peers on improving economic data and continued optimism over COVID-19 vaccines and U.S. politics. Brazil's real firmed for a second session, rising over 1%after figures showed the country's current account deficit narrowed to its smallest in 2-1/2 years in October, helped by a bigger-than-expected surplus in goods trade. Worries about Brazil's fiscal health, record-low interest rates and a second wave of coronavirus cases have hammered the real this year, but a brighter global mood has boosted the currency by more than 7% in November. The Chilean peso rose 0.3% as a surge in copper prices to near seven-year highs supported the currency of the world's top copper producer. The Colombian peso gained 0.6% , but the Mexican peso eased from nine-month highs. Investors have rushed to riskier emerging market assets in recent weeks after positive data on COVID-19 vaccine efficacy, while news that U.S. President Donald Trump began cooperating with President-elect Joe Biden's transition team ended weeks of political uncertainty in Washington. "While there has been already very strong positive news flow surrounding the vaccine, we do not believe that the vaccine trade is already done yet," Citi's Dirk Willer said in a note. "Pullbacks, maybe related to month end equity selling, should be seen as a buying opportunity." Stocks in the region edged higher, but Brazil's Bovespa and Mexico's IPC slipped almost 0.3%. A Reuters poll showed Brazilian stocks will reach pre-pandemic levels by the middle of next year, but concern about the impact of a resurgent pandemic could limit the recovery. The index is predicted to close this year at 108,000 points. It was last trading at 109,517. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1217.39 -0.7 MSCI LatAm 2236.67 0.45 Brazil Bovespa 109517.84 -0.24 Mexico IPC 42590.89 -0.34 Chile IPSA 4200.68 0.08 Argentina MerVal 54697.84 1.038 Colombia COLCAP 1266.46 -0.33 Currencies Latest Daily % change Brazil real 5.3201 1.02 Mexico peso 20.0815 -0.42 Chile peso 771.1 0.30 Colombia peso 3612.17 0.60 Peru sol 3.6078 0.03 Argentina peso (interbank) 80.7800 -0.10 (Reporting by Sruthi Shankar in Bengaluru; editing by Jonathan Oatis)

EMERGING MARKETS-Emerging EMEA markets steady as global rally continues

25 Nov 2020

Nov 25 The Turkish lira snapped three days of falls on Wednesday, while most emerging market currencies clung to recent gains as investors made riskier bets on hopes that COVID-19 vaccines will spur a strong economic rebound next year.

EMERGING MARKETS-Brazil's real leads Latam FX gains; stocks rally

24 Nov 2020

* Real adds 0.9% * Mexican, Colombian pesos gain on higher oil prices * Mexican economy to benefit from U.S. reopening- Analyst (Adds details, updates prices) By Ambar Warrick and Sruthi Shankar Nov 24 Brazil's real led gains across Latin American currencies on Tuesday, while stocks rallied after U.S. President Donald Trump cleared the way for a smooth White House transition, adding to recent market optimism about the prospect of COVID-19 vaccines. The real added about 0.9% to the dollar as increased October tax revenues painted an encouraging picture of economic recovery. But the currency has widely underperformed its regional peers this year, due to record-low interest rates, rising coronavirus cases and concerns over surging government debt. Treasury Secretary Bruno Funchal said the government was taking on large quantities of debt, leaving virtually no room to increase fiscal spending. The South American country also has the world's third worst outbreak of the virus, behind only the United States and India. Data showed Brazil's annual rate of inflation accelerated to 4.2% in mid-November, above the central bank's year-end target, lending weight to the recent raising of average interest rate forecasts by economists. Sao Paulo shares jumped to a near nine-month high, while the wider Latin American equities index rose more than 2%, tracking gains on Wall Street. A spike in oil prices spurred gains in the currencies of crude exporters Mexico and Colombia. The Mexican peso rose 0.5% to hold near its strongest levels since early March. The currency has been among the biggest beneficiaries of easing U.S. political uncertainty and news on vaccine breakthroughs this month. "With Mexico’s dominant trading partner– the buyer of roughly 80% of Mexican exports– likely to vaccinate key segments of its population by mid-2021, a rebounding US economy should help to bolster Mexico’s outlook," analysts at TS Lombard wrote in a note. The Trump administration on Monday gave President-elect Joe Biden access to critical resources that will enable him to take the reins of power in January, ending weeks of political uncertainty in Washington and driving the safe-haven dollar down. Meanwhile, Peru said an eager market had soaked up its offer of $4 billion worth of debt, including a rare century bond as it scrambles to raise funds to soften the economic fallout from the coronavirus crisis. Argentine stocks surged more than 5% in catch-up trade, while data showed that economic activity in the country contracted lesser-than-expected in September. Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1225.32 0.39 MSCI LatAm 2228.32 2.47 Brazil Bovespa 109810.68 2.26 Mexico IPC 42874.95 1.44 Chile IPSA 4197.36 1.6 Argentina MerVal 54249.10 5.354 Colombia COLCAP 1271.20 1.86 Currencies Latest Daily % change Brazil real 5.3842 0.93 Mexico peso 20.0560 0.53 Chile peso 774 -0.13 Colombia peso 3634 0.32 Peru sol 3.609 -0.14 Argentina peso 80.6800 -0.40 (interbank) (Reporting by Ambar Warrick and Sruthi Shankar in Bengaluru; Editing by Kirsten Donovan and Grant McCool)

EMERGING MARKETS-Dollar weakness supports EM currencies, lira slides again

24 Nov 2020

Nov 24 U.S. dollar weakness lifted most emerging market currencies on Tuesday as investors looked to U.S. politics and progress on COVID-19 vaccines, but the Turkish lira came under renewed pressure.

EMERGING MARKETS-Latam stocks gain on vaccine optimism, FX rally peters out

23 Nov 2020

* Mexican peso at below 20 per dollar for first time since March * Peru preps century bond issue * MSCI Latam stocks index up over 7% in last two weeks (Adds details, updates prices) By Sruthi Shankar and Ambar Warrick Nov 23 Latin American stocks rose on Monday, while currencies retreated from initial gains as progress towards a coronavirus vaccine bolstered hopes for economic activity to return to pre-pandemic levels. Bourses in Brazil, Chile and Mexico rose between 0.8% to 1.4%, tracking a rally in global equities after AstraZeneca said its COVID-19 vaccine, cheaper to make, easier to distribute and faster to scale-up than its rivals, could be as much as 90% effective. Emerging market assets were cheered by the simpler distribution logistics for the vaccine. Countries such as Brazil and India already have supply and manufacturing contracts in place for the vaccine. Positive vaccine news, coupled with the prospect of easy monetary policy for the duration of the pandemic has greatly benefited equities, with the MSCI's index of regional equities adding more than 7% over the past two weeks. But regional currencies came off initial gains as investors were still uncertain about the timing of a vaccine, while the economic ructions from the pandemic continued to show. A resurgence of infections in Brazil - Latam's largest economy - also dulled risk appetite. The real fell about 1%, while the Chilean peso fell more than 1%, tracking a slight decline in copper prices. Losses in the Mexican peso and the Colombian peso were mitigated by strength in oil markets. The Mexican unit fell slightly after briefly trading below 20 to a dollar for the first time since March. Renewed carry trade interest and relatively higher interest rates have seen the peso outperform most of its emerging market peers this year. "The immediate target is MXN19.80," Marc Chandler, chief market strategist at Bannockburn Global Forex told clients in a note. "The high nominal rates (~4.28% on a one-month bill, or cetes) and the broader gains among emerging market currencies appear to be fueling the peso's gains." Peru's sol edged lower as the country prepared a century bond in dollars after authorizing the issuance of debt of up to $4 billion to help rein in the country's coronavirus outbreak and soften its economic impact. The issuance comes days after newly appointed interim President Francisco Sagasti told Reuters that Peru planned to issue bonds in the near term to service the Andean nation's "very high" fiscal deficit. Argentine markets were closed for a holiday. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1218.90 0.8 MSCI LatAm 2164.80 0.1 Brazil Bovespa 107178.68 1.07 Mexico IPC 42357.27 1.08 Chile IPSA 4131.91 1.91 Colombia COLCAP 1246.99 0.58 Currencies Latest Daily % change Brazil real 5.4451 -1.09 Mexico peso 20.1343 -0.18 Chile peso 772.7 -1.14 Colombia peso 3645.55 -0.40 Peru sol 3.604 -0.26 (Reporting by Sruthi Shankar in Bengaluru; editing by Emelia Sithole-Matarise and Tom Brown)

EMERGING MARKETS-Mexican peso firms below 20 per dollar for first time since March

23 Nov 2020

By Sruthi Shankar Nov 23 The Mexican peso strengthened below 20 per dollar on Monday for the first time since early March as further positive updates on COVID-19 vaccines boosted appetite for Latin American assets. The peso traded up 0.5% at 20.047 per dollar after firming to as much as 19.936 earlier in the session. Risky assets across the globe rallied on signs that U.S. health regulators could grant approval in mid-December for distribution of the COVID-19 vaccine produced by Pfizer and German partner BioNTech. Britain's AstraZeneca said its vaccine could be around 90% effective without any serious side effects, making it the latest drugmaker to report late-stage results. A more than 1% rise in oil prices also supported the Mexican peso - which has outperformed regional peers this year despite a 5.5% drop. "The immediate target is MXN19.80," Marc Chandler, chief market strategist at Bannockburn Global Forex told clients in a note. "The high nominal rates (~4.28% on a one-month bill, or cetes) and the broader gains among emerging market currencies appear to be fueling the peso's gains." The Brazilian real, the Colombian and the Chilean pesos edged up 0.2% each. Brazil's government has already signed a COVID-19 vaccine supply contract with AstraZeneca and on Sunday its health ministry said it would sign non-binding letters of intent to purchase vaccines from four other companies and Russia's wealth fund. Stocks in the region gained 0.5%, tracking a broad rally in global equities on hopes that an early rollout of a vaccine will revive the global economy. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1221.78 1.04 MSCI LatAm 2174.54 0.55 Brazil Bovespa 107062.35 0.96 Mexico IPC - - Chile IPSA 4068.47 0.34 Argentina MerVal 51492.34 1.064 Colombia COLCAP 1242.02 0.18 Currencies Latest Daily % change Brazil real 5.3851 0.01 Mexico peso 20.0471 0.47 Chile peso 763.7 0.03 Colombia peso 3617.98 0.36 Peru sol 3.5947 0.00 Argentina peso (interbank) 80.3500 -0.09 (Reporting by Sruthi Shankar in Bengaluru; editing by Emelia Sithole-Matarise)

EMERGING MARKETS-Rand jumps despite ratings downgrade, EM stocks rally on vaccine hopes

23 Nov 2020

Nov 23 The South African rand jumped on Monday despite a pair of sovereign ratings downgrades, while emerging market stocks raced to a fresh 32-month high on hopes of an early rollout of COVID-19 vaccines.

US STOCKS-S&P 500, Dow slip as labor market recovery falters

19 Nov 2020

* Indexes: Dow down 0.41%, S&P off 0.13%, Nasdaq up 0.55% (Updates to early afternoon)

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