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Sruthi Shankar

EMERGING MARKETS-Argentina in red again, lagging steady Latam markets

3:55pm BST

By Sruthi Shankar Aug 20 Most Latin American currencies edged higher on Tuesday as investors speculated the path of U.S. interest rates amid growing signs that policymakers are willing to do more to stimulate their slowing economies. Bucking the trend, Argentina's peso shed over 1% even as the new Treasury Minister Hernan Lacunza sought to calm investors by saying the country will stand by the 2019 fiscal targets agreed with the International Monetary Fund, and work to stabilize its currency. After a tumultuous week marked by worries about escalation in U.S.-China trade tension, recession worries and a slump in Argentina's assets, financial markets steadied as major economies including China and Germany unveiled plans to support growth. With the U.S. dollar slipping, the Brazilian real and the Mexican peso rose about 0.6% as investors focused on minutes from the U.S. Federal Reserve's July meeting and the central bankers' meeting at Jackson Hole later this week, where Fed chief Jerome Powell is set to speak. "High expectations for monetary easing persist for upcoming Fed and ECB meetings," Morgan Stanley analysts wrote in a note. "Fed's Powell may have to wait for weaker global demand for U.S. exports and trade uncertainty to spill over into the domestic consumer sector before turning decisively dovish." Argentine investors returned from a holiday to continue selling the battered currency after former Treasury Minister Nicolas Dujovne resigned over the weekend following a downgrade on the country's sovereign debt by rating agencies Fitch and S&P. "Potentially, this new guy will be in office for only three months, so I don't think he'll be able to do much. I don't see his appointment as having much impact on the election," said Edward Glossop, Latin America economist at Capital Economics. "It's a job where he has his hands tied by the IMF framework as Argentina has fiscal goals it needs to reach and Lacunza doesn't have much discretion to loosen monetary policy." Keeping investors on edge, Argentine central bank chief Guido Sandleris said the country could face a fresh rise in inflation due to the recent free-fall in the peso, which has shed about 18% since a shock defeat for business-friendly President Mauricio Macri in Aug. 11 primaries. Argentina's main stock index fell more than 8%, while Brazil's Bovepsa and Mexico's IPC edged slightly lower. Latin American stock indexes and currencies at 1430 GMT: Stock indexes daily % Latest change MSCI Emerging Markets 980.45 0.28 MSCI LatAm 2581.70 0.06 Brazil Bovespa 99325.00 -0.14 Mexico IPC 39701.51 0.37 Chile IPSA 4779.92 -0.15 Argentina MerVal 27905.53 -8.23 Colombia IGBC 12559.08 0.25 Currencies daily % change Latest Brazil real 4.0404 0.65 Mexico peso 19.7436 0.56 Chile peso 709.7 0.51 Colombia peso 3413.16 0.59 Peru sol 3.381 0.15 Argentina peso 55.5700 -1.03 (interbank) (Reporting by Sruthi Shankar in Bengaluru, additional reporting by Tom Arnold in London Editing by Nick Zieminski)

EMERGING MARKETS-Stocks draw support from stimulus hopes; lira drops 1%

10:30am BST

* Philippines to boost infrastructure spending in 2020 budget

EMERGING MARKETS-Latam stocks lifted by stimulus hope, currencies weaken

19 Aug 2019

By Sruthi Shankar Aug 19 Brazil stocks rose for a second straight session on Monday, as signs of stimulus for China's slowing economy eased growth worries, although currencies in the region weakened in line with their emerging market peers. Sao Paulo-listed stocks rose about 0.5%, tracking gains for global stock markets after China's central bank announced key interest rate reforms over the weekend, fueling expectations of an imminent reduction in corporate borrowing costs. State-run oil firm Petrobras rose nearly 2% as oil prices gained following a weekend attack on a Saudi oil facility by Yemen's Houthi forces. The prospect for fiscal stimulus for Germany also helped the mood, with Mexican stocks jumping more than 1%, while the MSCI's index of emerging market stocks rose 0.8%. "Equity markets and government bonds are up with the USD losing ground on the back of the expectation that fiscal measures in Germany and changes in PBoC's monetary policy may avoid or at least delay the widely anticipated economic global recession," Banorte Research analysts wrote in a note. Financial markets are coming off a rough week, marked by worries about an escalation in the U.S.-China trade war, moves in the U.S. bond market pointing to recession on the horizon and turmoil in Argentine markets. Currencies, meanwhile, were on the back foot as investors speculated about the path of U.S. interest rates ahead of U.S. Federal Reserve Chairman Jerome Powell's speech at an annual meeting of central bankers in Jackson Hole later this week. The Brazilian real and the Mexican peso dropped about 0.7%, while the Chilean peso fell 0.4% after central bank data showed the country's gross domestic product grew 1.9% in the second-quarter of 2019 as slumping global trade and falling copper prices continue to take their toll. Markets in Argentina were closed for a local holiday, and investors will watch for signs of further weakness when markets open for trading after ratings agencies Fitch and Standard & Poor's downgraded Argentina's sovereign debt rating and Treasury Minister Nicolas Dujovne resigned amid economic crisis. Argentine markets have collapsed since last week's primary vote saw opposition candidate Alberto Fernandez trouncing business friendly President Mauricio Macri. The cost of insuring against an Argentine sovereign default rose after Fernandez said the country would struggle under present conditions to repay a loan to the International Monetary Fund. Latin American stock indexes and currencies at 1455 GMT: MSCI Emerging Markets 978.35 0.83 MSCI LatAm 2599.97 -0.38 Brazil Bovespa 100313.38 0.51 Mexico IPC 39623.24 0.72 Chile IPSA 4823.77 0.53 Argentina MerVal 30406.65 -2.038 Colombia IGBC 12527.47 1.1 Currencies Latest Daily % change Brazil real 4.0311 -0.70 Mexico peso 19.8020 -0.77 Chile peso 711.7 -0.41 Colombia peso 3438.72 -0.16 Peru sol 3.384 -0.18 Argentina peso - - (interbank) (Reporting by Sruthi Shankar in Bengaluru Editing by Chris Reese)

EMERGING MARKETS-Stimulus hope lifts Chinese stocks to 2-week high; currencies mostly weaken

19 Aug 2019

Aug 19 Chinese stocks rallied to two-week highs on Monday after the central bank unveiled tweaks to its interest rate setting, offering hope to investors that major economies will use stimulus measures to battle a global slowdown.

EMERGING MARKETS-Argentine peso rebounds after bruising sell-off; Latam FX firm

15 Aug 2019

By Sruthi Shankar Aug 15 Argentina's peso jumped on Thursday after a bruising sell-off in the past three sessions and most other Latin American currencies stabilized amid receding worries about a recession in the world's largest economy. The Brazilian real jumped as much as 1% before easing slightly to trade at 4.0286 per dollar after the central bank announced its decision to sell dollars in the spot currency market for the first time in over a decade. The Brazilian central bank said on Wednesday it would sell up to $550 million daily in the spot market along with reverse swaps of the same value, in response to rising demand for liquidity. The Mexican peso edged higher ahead of the central bank's decision on interest rates, due at 2:00 p.m. EDT (1800 GMT). Analysts expect policymakers to hold rates at 8.25%, according to a Reuters poll, although they are expected to adopt a dovish tone pointing to impending rate cuts. "While our economists call for the easing cycle to begin in September, they note a high risk for an August start," Citi analysts wrote in a note. "If they cut at this meeting, we would imagine it comes with language that tries to dissuade the market from positioning for a very deep cutting cycle, partly because Banxico wants to observe how MXN reacts to the easing." Latin American currencies and stocks lost steam on Wednesday amid a slump in global financial markets after moves in U.S. bonds signaled that the world's biggest economy will tip into recession in the wake of a prolonged trade dispute with China. Easing some of those fears was data that showed U.S. retail sales rose more than expected last month, suggesting fairly robust consumer spending. However, mixed reports on the U.S.-China trade front kept investors wary. News that China will retaliate against the latest U.S. tariffs hit global stocks, which turned around after a Beijing official said China hoped the two sides will come to deal. The Argentine peso opened stronger after a three-day rout in the currency on investor worries about the country's return to populist policies after business friendly President Mauricio Macri fared worse than expected in this week's presidential primaries. The peso jumped nearly 4.7% to trade at $57.5 per dollar after shedding more than 24% over the past three days even as Macri announced a series of welfare subsidies and tax cuts for lower-income workers. Opposition candidate Alberto Fernandez said he was comfortable with the current exchange rate of 60 pesos per U.S. dollar. Latin American stock indexes and currencies at 1344 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 961.82 -0.27 MSCI LatAm 2568.64 -1.07 Brazil Bovespa 99335.09 -0.92 Mexico IPC - - Chile IPSA - - Argentina MerVal - - Colombia IGBC - - Currencies Latest Daily % change Brazil real 4.0373 0.39 Mexico peso 19.6785 -0.02 Chile peso - - Colombia peso 3457.64 -0.06 Peru sol - - Argentina peso 57.4955 4.82 (Reporting by Sruthi Shankar in Bengaluru; Editing by Sandra Maler)

EMERGING MARKETS-Stocks fall for a fifth day as recession worries grow

15 Aug 2019

Aug 15 Emerging-market stocks fell for a fifth straight session on Thursday as fears of a global recession grew and most currencies struggled, although the South African rand and the Turkish lira gained.

EMERGING MARKETS-Latam markets struggle as recession fears grow; Argentine peso down again

14 Aug 2019

By Sruthi Shankar Aug 14 The Argentine peso declined for a third day on Wednesday and most Latin American markets weakened as worrying economic data from China and Germany and moves in U.S. bond markets suggested a recession for major global economies is on the horizon as a bruising U.S.-China trade war drags on. The Brazilian real fell more than 1%, crossing the key 4-per-dollar level for a third day in a row. The Mexican , the Chilean and the Colombian pesos dropped between 0.6% and 0.8%. Emerging markets have been swayed this week by a plunge in Argentina's peso currency to a record low, news that U.S. tariffs on certain Chinese goods will be delayed and an inversion of the U.S. Treasury bond yield curve for the first time since 2007, a classic recession signal. The moves in bond market followed data earlier that showed Germany's economy shrank in the second quarter as a result of a slump in exports, while another set showed industrial output growth in China cooling to a more than 17-year low. There were few signs of the Argentine peso stabilizing as President Mauricio Macri announced measures including income tax cuts for workers and increased subsidies for social services after his shockingly poor showing in Sunday's presidential primaries. The peso opened 12.3% weaker at 61 per U.S. dollar, set for its third session of losses. The currency has shed more than 20% since Sunday when the center-right leader finished far behind his chief Peronist challenger, Alberto Fernandez, in primary elections, bringing worries of populist policies for financial markets. "These measures are unlikely to change the election results or stabilize financial markets, even though a large part of the re-pricing is now likely behind us," Citi analysts wrote in a note. Although the Merval stock index recovered slightly, the probability of a sovereign default by Argentina within the next five years shot up to 78%. Among other stock markets, the Bovepsa fell 1.8% as Brazil's largest education company, Kroton Educacional SA , slid 7% after reporting quarterly results. Planemaker Embraer dropped 3% after reaffirming it would report a loss for 2019. Latin American stock indexes and currencies at 1441 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 965.08 -0.39 MSCI LatAm 2621.36 -2.81 Brazil Bovespa 101319.99 -1.92 Mexico IPC 38884.29 -1.5 Chile IPSA 4801.48 -0.91 Argentina MerVal 30609.55 0.87 Colombia IGBC 12519.34 -1.13 Currencies Latest Daily % change Brazil real 4.0111 -1.13 Mexico peso 19.5494 -0.92 Chile peso 711 -0.84 Colombia peso 3444.81 -1.02 Peru sol 3.393 -0.27 Argentina peso 58.1000 -3.79 (interbank) (Reporting by Sruthi Shankar in Bengaluru)

EMERGING MARKETS-Stocks rise on trade relief, growth worries curb optimism

14 Aug 2019

Aug 14 Asian equities and currencies led gains in emerging markets on Wednesday on relief over Washington's move to delay tariffs on some Chinese goods, although weak data and political turmoil continued to weigh on risk sentiment.

EMERGING MARKETS-Argentina's peso extends slide, stocks rebound on China relief

13 Aug 2019

By Sruthi Shankar Aug 13 Argentina's peso dropped again on Tuesday after a shocking defeat for business friendly President Mauricio Macri in Sunday's primary election raised fears of populist policies, although Latin American stock markets rebounded after the United States delayed tariffs on certain Chinese goods. The peso fell another 4% after a near 16% plunge on Monday. The currency had fallen 30% to record low of 61.995 per dollar in the previous session, sending shockwaves across global financial markets. Opposition candidate Alberto Fernandez, who has former President Cristina Fernandez as his running mate, pulled off a stunning upset in the primary with a wider-than-expected 15-point lead over incumbent president Macri. "The news ... raised the specter of the populist opposition seeking to renegotiate/default on the IMF loans coming to maturity," Jefferies analysts wrote in a note. "Yesterday's currency slump will only cause inflation to remain stubbornly high thereby keeping monetary policy tight and in turn causing further public disillusionment with the current administration." The cost of insuring against an Argentine sovereign default jumped again on Tuesday. Data provider IHS Markit showed five-year credit default swaps (CDS) marked at 2,116 basis points, up from what was already a five-year high the previous day. However, the Merval stock index rose more than 10% after closing down 31% on Monday. Equities and other risk assets across the globe took relief from news that the Trump administration will delay 10% tariffs on certain Chinese products, including laptops and cell phones, that had been scheduled to start next month. Investors have been edge as a recent escalation in the U.S.-China trade dispute, including the weakening of the yuan past the 7-per-dollar mark, raised fears of recession. The Brazilian real reversed early losses to trade up 0.7%. The currency had weakened past the 4-per-dollar level on Monday for the first time since late May. The Bovespa index rose more than 1%, mirroring gains on Wall Street. Latin America's largest independent investment bank, Banco BTG Pactual SA, jumped 5% after reporting a 50.2% increase in second-quarter recurring profit. Shares of Brazil's state-controlled power company Eletrobras , however, fell 0.7%, despite its second-quarter net income soaring 305% from a year ago. Latin American stock indexes and currencies at 1453 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 972.71 -0.18 MSCI LatAm 2711.39 2.17 Brazil Bovespa 103597.48 1.65 Mexico IPC 39842.99 -0.02 Chile IPSA 4865.26 0.78 Argentina MerVal 30744.21 11.67 Colombia IGBC 12634.72 1.48 Currencies Latest Daily % change Brazil real 3.9520 0.78 Mexico peso 19.4619 0.74 Chile peso 706.4 1.08 Colombia peso 3381.63 1.27 Peru sol 3.374 0.21 Argentina peso 55.5000 -3.60 (interbank) (Reporting by Sruthi Shankar in Bengaluru)

EMERGING MARKETS-Argentina rout, Hong Kong protests weigh on risk sentiment

13 Aug 2019

Aug 13 A broad risk aversion hit emerging market currencies and stocks on Tuesday, as fears about the fallout from escalating protests in Hong Kong and one of the worst selloffs in Argentina's markets pushed investors to look for safer assets.

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