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United Kingdom

Susan Mathew

European stocks slip as hopes of post-pandemic rebound fade

07 Jul 2020

European shares fell on Tuesday as surging U.S. coronavirus cases and forecasts for a deeper-than-feared recession in the euro zone dimmed optimism around a post-pandemic rebound.

China recovery hopes, upbeat data lift European shares; HSBC leads

06 Jul 2020

European shares closed at their highest in nearly a month on Monday, as upbeat economic data tied in with a rally in China's markets on hopes of recovery from a coronavirus-induced slump.

EMERGING MARKETS-Latam stocks, FX set to mark third week in red as virus cases surge

26 Jun 2020

(Updates prices) By Shreyashi Sanyal and Susan Mathew June 26 Latin American currencies and stocks eyed their third straight week of declines as rising coronavirus cases in the region and globally put a question mark over the pace of recovery from the pandemic-fueled slump. The MSCI's index for Latin American stocks tumbled 3.6% for its worst session in two months, while its currencies counterpart fell 1.8%. Over the week, they were down about 4% and 1.5%, respectively. Cases in South America continued to accelerate, with Mexico's health ministry reporting 6,104 new confirmed cases and 736 deaths on Thursday, while the country's Finance Minister Arturo Herrera tested positive for the virus. Brazil remained the second largest COVID-19 hot spot in the world, topped only by the United States, which reported a record daily rise in cases on Thursday. Some month and quarter-end adjustments could also be playing into markets, analysts said. The Brazilian real led declines among regional counterparts, weakening 2.6% against a steady dollar, while the country's main stock index looked to post its biggest drop since late April. In Latin America's biggest economy, the Federal University of Sao Paulo is in talks to test a potential coronavirus vaccine developed by Italian researchers. Mexico's peso slipped 1.4% after data showed Mexico's economy posted a record contraction in April, highlighting the devastation caused by lockdowns on economic activity, particularly in manufacturing. The Chilean peso also fell 1%, as the world's biggest copper miner Codelco said it was suspending refinery and foundry operations at its sprawling Chuquicamata division to prevent further spread of the coronavirus. An unabated rise in cases and gloomy economic forecasts have stalled a sharp recovery for Latin American stocks from a meltdown in March, with investors doubtful if current stimulus measures will suffice. Meanwhile, International Monetary Fund Managing Director Kristalina Georgieva said the global economic crisis due to the coronavirus could ultimately test the fund's $1 trillion in total resources, "but we're not there yet." Next week, investors will be watching for a rate decision from Colombia's central bank, and manufacturing PMIs for June for Mexico and Brazil. A Reuters polls showed Argentina's economic activity, due on Monday, likely plunged 21% in April. Key Latin American stock indexes and currencies at 1924 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 998.81 -0.56 MSCI LatAm 1856.84 -3.55 Brazil Bovespa 93611.28 -2.47 Mexico IPC 37499.85 -0.62 Chile IPSA 4012.17 -0.65 Argentina MerVal 40590.31 -3.349 Colombia COLCAP 1118.02 -0.62 Currencies Latest Daily % change Brazil real 5.4627 -2.49 Mexico peso 22.9910 -1.50 Chile peso 819.4 -0.95 Colombia peso 3747 -0.44 Peru sol 3.5277 -0.71 Argentina peso 70.2100 -0.07 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis and Tom Brown)

FTSE 100 gains on defensive rally, ends week lower on virus worries

26 Jun 2020

A rally in consumer stocks and a battered pound helped London's FTSE 100 outperform world stocks at the end of a choppy week on Friday as investors weighed optimism about a revival in business activity against a surge in global coronavirus infections.

EMERGING MARKETS-Mexican peso up, cenbank cuts rates; Brazil's real struggles

25 Jun 2020

* Mexican cbank cuts rates by 50 bps to 5% * More cuts in the offing - analyst * Brazil's real swings in volatile trade; last down 0.2% * Brazil's new sanitization bill could lure investors (Updates after Mexican central banks decision) By Susan Mathew June 25 Mexico's peso rose half a percent on Thursday after the central bank cut the country's key interest rate by 50 basis points, as widely expected, to help the economy as it faces a deep recession due to the coronavirus pandemic. The peso shed some gains right after the decision but then scaled session highs. The bank slashed rates to 5% in a unanimous decision by its five board members, citing risks to growth and stable inflation in the short term. "The outlook component of the statement remains relatively unchanged, which gives us confidence in maintaining our current policy rate forecast of two further 50bp cuts, followed by two 25bp cuts, that will bring the policy rate to 3.50% by end of year," said Sacha Tihanyi, deputy head of emerging market strategy at TD Securities. Chile's peso tracked copper, its largest export item, higher, while Colombia's currency was flat against a stronger dollar. Brazil's real last traded 0.2% lower in high volatility. The central bank chief said Brazil's GDP outlook is brighter than the newly reduced forecast of a 6.4% contraction this year, adding that the bank has not abandoned its inflation goals. The estimate compares to the International Monetary Fund's 9.1% contraction for the country expected this year. Meanwhile, Brazil approved a new sanitation bill in a move that is expected to prompt states and municipalities to privatize water and sewage companies, luring investors. Sao Paulo listed stocks rose 1.6% with industrial stocks among the biggest gainers. MSCI's index for Latin American stocks was flat with other regional benchmarks trading mixed. The index has fallen about 32% this year with the region emerging as the latest coronavirus epicenter. Researchers said the death toll from COVID-19 in Latam is expected to rocket to 388,300 by October, with Brazil and Mexico seen accounting for two-thirds of fatalities. The IMF warned on Thursday that stocks and other risky assets could suffer a second swoon if the coronavirus spreads more widely, lockdowns are reimposed or trade tensions surge again. In Argentina, Economy Minister Martin Guzman said the country is working with its creditors to reach a debt restructuring deal after talks stalled, though there is still distance to cover in economic and legal terms. Key Latin American stock indexes and currencies at 1939 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1005.02 -0.57 MSCI LatAm 1928.68 0.06 Brazil Bovespa 95857.37 1.57 Mexico IPC 37766.39 -0.37 Chile IPSA 4045.59 0.23 Argentina MerVal 41546.19 2.747 Colombia COLCAP 1123.48 -0.18 Currencies Latest Daily % change Brazil real 5.3310 -0.15 Mexico peso 22.6710 0.47 Chile peso 811.6 0.84 Colombia peso 3730.37 -0.09 Peru sol 3.5028 0.14 Argentina peso 70.1500 -0.07 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Dan Grebler and Marguerita Choy)

UK blue-chips rise with European peers; Royal Mail drags mid caps lower

25 Jun 2020

London's blue-chip FTSE 100 ended higher on Thursday as banks and energy stocks climbed, while the domestically focused mid-caps index slipped amid worries over the economic damage being wrought by the coronavirus pandemic.

EMERGING MARKETS-Latam FX, stocks fall on spike in virus cases, dour growth forecast

24 Jun 2020

* Brazil's real down 3.3%, Mexico's peso ends 3-day winning run * IMF slashes Latam growth forecast on pandemic woes * Mexico inflation rises but analysts say rate cut still on * MSCI warns Argentina could be booted from EM index (Updates prices) By Shreyashi Sanyal and Susan Mathew June 24 Latin American currencies and stocks fell on Wednesday, with Brazil's real down 3%, as COVID-19 infections continued to climb at an alarming pace, with investors scurrying for safety after downbeat economic forecasts for major regional countries. The death toll from COVID-19 surpassed 100,000 in Latin America on Tuesday, according to a Reuters tally, with few signs of the outbreak easing. A surge in cases in the United States and parts of Europe dented broader sentiment. The International Monetary Fund slashed its 2020 global output forecasts further as it now expects global output to shrink 4.9%, compared with a 3.0% contraction predicted in April due to impacts of the pandemic. Latin American economies saw some of the biggest downgrades, with Brazil's now seen shrinking 9.1%, Mexico's 10.5% and Argentina's 9.9%. The MSCI's index of regional stocks counterpart slumped 3.7% and its currency counterpart 2.3%, both marking their worst day in two months. They are down about 35% and 19% for the year, despite double digit percentage recoveries since year-lows. The Brazilian real weakened 3.3%, the most among regional peers. Brazil's public sector primary deficit this year excluding interest payments could be more than 11% of gross domestic product, Treasury Secretary Mansueto Almeida said, while the economy is set to shrink about 6% to 7%. The Mexican peso declined 1.6% after a three-day winning streak. Mexico's President on Wednesday said total layoffs in June could reach as high as 130,000. Data on Wednesday showed Mexican consumer prices rose more than expected during the first half of June, a figure that will likely keep policymakers in a cautious mood but is unlikely to deter them from slashing rates on Thursday to 5%. "Given the scale of the economic downturn, there's still scope for significant easing," said William Jackson, chief emerging markets economist at Capital Economics. "We expect 150 basis points of cuts in the policy rate this year, including a 50bps reduction tomorrow." Other regional currencies traded lower against a stronger U.S. dollar. Among others, MSCI Inc, the world's largest index provider, warned on Tuesday that Argentina could be removed from the MSCI Emerging Markets Index if it became harder for foreign investors to access its stock market. Argentina imposed tough capital controls last year after a market crash led to a dramatic pickup in foreign currency demand. Key Latin American stock indexes and currencies at 1902 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1008.57 -0.6 MSCI LatAm 1905.58 -3.71 Brazil Bovespa 94227.93 -1.82 Mexico IPC 37871.51 -0.91 Chile IPSA 4036.34 0.11 Argentina MerVal 40285.85 -1.269 Colombia COLCAP 1117.01 -2.3 Currencies Latest Daily % change Brazil real 5.3260 -3.27 Mexico peso 22.7756 -1.61 Chile peso 818.8 -0.06 Colombia peso 3727.62 -0.79 Peru sol 3.5078 0.40 Argentina peso 70.0900 -0.07 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernadette Baum and Tom Brown)

EMERGING MARKETS-Latam FX, stocks join global rally on economic recovery hopes

23 Jun 2020

* Brazil's real up 2.4%; cenbank sees less scope for rate cuts * Upbeat PMIs from Europe, U.S. fuel hopes for economic recovery * MSCI's latam stocks index up 1.5% * Foreign flows to Latam risks "drying out"- Colombian ex-finmin (Updates prices) By Susan Mathew June 23 Latin American stocks and currencies rose on Tuesday as upbeat data from Europe and the United States raised hopes of an economic recovery, with Brazil's real jumping 2.4% after its central bank saw little scope to cut interest rates much further. The real extended gains to a third session after minutes of the central bank's last meeting showed monetary policy committee members urged caution in easing rates. The real had underperformed last week after the central bank cut its key interest rates further into record low territory. Also aiding sentiment in Brazil were new measures to help mitigate economic damage from the coronavirus pandemic, including a credit program for small firms that could total 55.8 billion reais ($10.85 billion), and $3 billion in emergency aid for power companies. Other regional currencies traded flat to higher against a weaker dollar, with Colombia's peso touching a near two-week high. MSCI's index of Latam stocks, meanwhile, rose 1.5%, with main stock indexes in Brazil and Mexico up 0.6% and 0.4% respectively. The moves were in line with global markets that cheered confirmation that the U.S.-China trade pact was "fully intact", after earlier confusing statements from the White House. Investors also took heart from a slowing pace of contraction in PMIs in Europe and United States. But foreign investment in Latam risks "drying out" due to economic turmoil and fiscal instability sparked by the pandemic, especially if Chinese-led commodity demand remains weak, Mauricio Cardenas, a former Colombian finance minister, said in an interview with the Reuters Global Markets Forum on Tuesday. Regional markets have been hit by selling pressure recently amid the surging number of COVID-19 cases in Latin America. The MSCI's index of Latin American currencies is down 17% this year, while its currency counterpart is down about 32%, despite double digit percentage recoveries since year-lows. More bleak growth forecasts continued to pour in for South American countries, as Chile's Budget Office said on Monday the economy would shrink 6.5% in 2020, a far deeper contraction than predicted just two months ago. For Colombia, the release of the Medium Term Fiscal Framework next week will be key in determining if the country can preserve its investment grade status, Cardenas said, against the backdrop of its decision to suspend deficit limits until 2022. Key Latin American stock indexes and currencies at 1948 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1014.74 1.45 MSCI LatAm 1981.66 1.48 Brazil Bovespa 95895.26 0.59 Mexico IPC 38271.63 0.39 Chile IPSA 4024.26 0.64 Argentina MerVal 40959.94 1.526 Colombia COLCAP 1144.51 -1.46 Currencies Latest Daily % change Brazil real 5.1475 2.40 Mexico peso 22.4160 0.31 Chile peso 818.3 -0.22 Colombia peso 3698.25 0.75 Peru sol 3.5217 -0.47 Argentina peso 70.0300 -0.07 (interbank) (Additional reporting by Aaron Saldanha and Lisa Pauline Mattackal in Bengaluru; Editing by Sonya Hepinstall)

London stocks gain on reopening optimism, upbeat PMIs

23 Jun 2020

London shares rose on Tuesday as Prime Minister Boris Johnson took more steps to relax the country's coronavirus lockdown, while a smaller than expected decline in Britain's private sector raised hopes for the economy's recovery from a pandemic-induced slump.

EMERGING MARKETS-Latam stocks slump as surging virus cases raise economic worries

22 Jun 2020

* Number of COVID-19 cases in Latam surge * Brazil's Bovespa down 1.3%, Mexico's IPC off 0.7% * Mexico's peso, Brazil real up as dollar weakens * "Best of Latam FX rally" likely run its course - JP Morgan (Recasts throughout, updates prices) By Susan Mathew June 22 Key Latin American stock indexes fell on Monday as the surging number of new COVID-19 cases in the region sparked fears of further lockdowns that could deepen economic pain. Taking no solace from the rise on Wall Street, Brazil's Bovespa index broke a four-session winning streak, down 1.3%, while main stock indexes in Mexico and Chile both lost more than 0.7%. Argentine stocks fell for a fourth session in five. More than a quarter of the 183,000 new COVID-19 cases reported worldwide on Sunday were from Brazil, the World Health Organization said. Brazil is the second worst-hit country after the United States, and has frequently over the last month recorded more than 1,000 deaths a day. Coronavirus-related deaths in Mexico have exceeded 20,000, while Chile, the world's largest copper producer, has ramped up safety measures at some of its biggest copper mines as the country logged nearly 247,000 confirmed cases and more than 4,502 deaths due to COVID-19. Chile's peso traded flat on Monday despite a rise in copper prices. A weak dollar aided gains in other Latam currencies with Mexico's peso up 0.8%, while Brazil's real firmed 1% after ending Friday with its biggest weekly loss since late April. FX strategists at JP Morgan said "the best of the Latam FX rally has likely run its course." "Signs of a second wave makes us more nervous that Latam can continue to enjoy its balance of payments sweet spot for much longer. We therefore expect a much bumpier third quarter that will need a much more tactical approach," they said in a note. Problems in Brazil such as political uncertainty, continued concerns over fiscal needs and the scope for more policy rate cuts than priced by the markets should again start to dominate price action for the currency, the JP Morgan strategists said. MSCI's index of Latin American currencies is down about 18% this year, having recovered about 10% from year-lows hit in May. Its stocks counterpart has gained around 42% since March lows, but still remains down about 33% for the year. Later this week, investors will be watching a central bank meeting in Mexico. A Reuters poll expects the bank to cut its key rate by 50 basis points to 5.00% as it attempts to help the economy out of a health crisis-induced recession. Colombian markets were closed for a local holiday. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 999.88 -0.15 MSCI LatAm 1937.13 -0.15 Brazil Bovespa 95359.32 -1.26 Mexico IPC 38125.24 -0.73 Chile IPSA 3993.92 -0.82 Argentina MerVal 40116.05 -2.04 Currencies Latest Daily % change Brazil real 5.2670 0.94 Mexico peso 22.4860 0.65 Chile peso 816.5 -0.13 Peru sol 3.505 -0.12 Argentina peso 69.9700 -0.24 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Sonya Hepinstall)

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