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Susan Mathew

EMERGING MARKETS-Stocks rise to highest in more than two and a half months

10:12am BST

Oct 22 Emerging-market shares touched their highest in more than two and a half months on Tuesday after encouraging comments from Washington regarding its trade relation with China.

EMERGING MARKETS-Chile markets hammered by weekend protests, other Latam FX weaken

21 Oct 2019

(Updates market prices) By Susan Mathew Oct 21 Latin American currencies slipped against a steady dollar on Monday, while Chile markets tumbled after a state of emergency was declared in the capital city of Santiago following violent protests over the weekend. Chile's peso shed as much as 2.4% to 727.33 per dollar and was on course to log its biggest one-day drop in more than 6 years, while stocks sank almost 5% in what could be their worst day in about two years. The military was put in charge of security in Santiago after youth protests against fare hikes on public transport implemented earlier this month turned to vandalism and arson. President Sebastian Pinera later extended emergency rule to cities to the north and south of the capital. Chile's finance minister Felipe Larrain said on Monday that the civil unrest will "undoubtedly" have an impact on the economy. "The events were entirely unexpected and should lead to a weaker CLP in the near term," analysts at Citigroup wrote in a note. "We don't expect the weakness to sustain unless the situation deteriorates much further." While Citi Economics differs from market expectations of a cut in interest rates by Chile's central bank on Wednesday, the risk of one has certainly increased after the unrest, they said. Workers at BHP's Escondida copper mine in Chile - the world's largest - said they would hold a day-long strike on Tuesday in a show of solidarity. Copper prices shot up on the London Metals exchange. Brazil's real slipped 0.4% with the final Senate vote on the government's pension reform bill expected to take place on Tuesday. The reform is seen as crucial to reducing Brazil's primary deficit and spurring a recovery in the sluggish economy. If the bill wins Tuesday's vote, that will clear the way to passing the bill into law. The real has seen volatility for months as the bill made its way through houses of parliament after President Jair Bolsonaro's administration introduced it upon taking office in January. Lower oil prices pressured crude exporter Colombia's currency, while Mexico's peso fell 0.1% but hovered near 2-1/2 month highs as broader market sentiment was buoyed by trade optimism. Over the weekend, Chinese Vice Premier Liu He said Beijing will work with Washington to address each other's concerns on trade issues. Most stocks in the region inched higher, tracking a rise on Wall Street. While banks and steel companies dragged Sao Paulo-listed shares higher, education company Yduqs, up 3.6%, was among the top gainers on the index on news it bought Adtalem Global Education Inc's local assets for 1.92 billion reais ($467 million). Key Latin American stock indexes and currencies at 1931 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1028.75 0.46 MSCI LatAm 2712.81 0.06 Brazil Bovespa 105766.53 0.99 Mexico IPC 43363.51 0.43 Chile IPSA 4953.20 -4.61 Argentina MerVal 32367.51 1.248 Colombia IGBC 12854.59 0.17 Currencies Latest Daily % change Brazil real 4.1340 -0.37 Mexico peso 19.1239 -0.12 Chile peso 725.6 -2.29 Colombia peso 3447 -0.65 Peru sol 3.3368 -0.02 Argentina peso (interbank) 58.4900 -0.24 (Reporting by Susan Mathew in Bengaluru; Editing by Chizu Nomiyama and Sonya Hepinstall)

EMERGING MARKETS-Violent protests in Chile hammer its markets, other Latam FX weaken

21 Oct 2019

By Susan Mathew Oct 21 Latin American currencies slipped against a steady dollar on Monday, while Chile markets tumbled after a state of emergency was declared in the capital city of Santiago following violent protests over the weekend. Chile's peso slumped 2% and was on course to log its biggest one-day drop in more than 6 years, while stocks sank almost 3% in what could be their worst day in two years. The military was put in charge of security in Santiago after youth protests against fare hikes on public transport implemented earlier this month turned to vandalism and arson. President Sebastian Pinera later extended emergency rule to cities to the north and south of the capital. "The events were entirely unexpected and should lead to a weaker CLP in the near term," analysts at Citigroup wrote in a note. "We don't expect the weakness to sustain unless the situation deteriorates much further." While Citi Economics differs from market expectations of a cut in interest rates by the central bank later this week, the risk of one has certainly increased after the unrest, they said. Workers at BHP's Escondida copper mine - the world's largest - said they would hold a day-long strike on Tuesday in a show of solidarity. Copper prices shot up on the London Metals exchange. Brazil's real slipped half a percent with the final Senate vote on the government's pension reform bill expected to take place on Tuesday. The reform is seen as crucial to reducing Brazil's primary deficit and spurring a recovery in the sluggish economy. If the bill wins Tuesday's vote, that will clear the way to passing the bill into law. The real has seen volatility for months as the bill made its way through houses of parliament after President Jair Bolsonaro's administration introduced it upon taking office in January. Lower oil prices pressured crude exporter Colombia's currency, while Mexico's peso fell 0.1% but hovered near 2-1/2 month highs as broader market sentiment was buoyed by trade optimism. Over the weekend, Chinese Vice Premier Liu He said Beijing will work with Washington to address each other's concerns on trade issues. Most stocks in the region inched higher, tracking a rise on Wall Street. Yduqs was the biggest gainer on Brazil's benchmark index after the education company said it bought Adtalem Global Education Inc's local assets for 1.92 billion reais ($467 million). Key Latin American stock indexes and currencies at 1412 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1027.98 0.39 MSCI LatAm 2701.13 -0.37 Brazil Bovespa 104790.56 0.06 Mexico IPC 43368.95 0.44 Chile IPSA 5043.10 -2.88 Argentina MerVal - - Colombia IGBC 12861.17 0.22 Currencies Latest Daily % change Brazil real 4.1332 -0.35 Mexico peso 19.1307 -0.16 Chile peso 725.3 -2.25 Colombia peso 3437.23 -0.37 Peru sol 3.3418 -0.17 Argentina peso 58.5500 -0.34 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Chizu Nomiyama)

EMERGING MARKETS-Trade optimism lifts EM markets, lira weakens with eyes on Syria

21 Oct 2019

Oct 21 Signs of progress in U.S.-China trade talks lifted emerging stocks on Monday and propelled an index of developing world currencies to an 80-day high, while Turkey's lira weakened as all eyes remained on Ankara's latest military movements in Syria.

EMERGING MARKETS-Latam FX firm against weak dollar, stocks steady

18 Oct 2019

By Susan Mathew Oct 18 Latin American currencies firmed on Monday against a dollar that remained pressured by a strong euro as the focus stayed on Brexit developments. Brazil's real gained 0.4% and Mexico's peso rose 0.1% to resume its gaining streak for a seventh session in eight. Chile's peso hit its highest in a month. The dollar slipped again as the euro extended last session's rally and hit a seven-week high after Britain and the European Union clinched a deal on Thursday for an orderly British exit from the bloc. Regional stocks tracked Wall Street's lackluster moves and traded flat. Sentiment had taken a hit after data showed the Chinese economy expanded at its weakest pace in almost 30 years, reinforcing global growth slowdown fears and reiterating the need for a U.S.-China trade deal. MSCI's Latam shares index fell, looking set to break a seven-session winning streak. On the week, the index was poised for a third week of gains. Shares of Petroleo Brasileiro were the biggest boosts on Brazil's main index after the state oil firm posted a significant production boost in the third quarter. In Mexico, conglomerate Alfa was among the worst performers on the IPC index after it reported double-digit drops in revenue and net profit for the third quarter. Key Latin American stock indexes and currencies at 1359 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1026.70 -0.16 MSCI LatAm 2714.09 -0.22 Brazil Bovespa 105168.69 0.15 Mexico IPC 43491.07 0.03 Chile IPSA 5176.57 0.08 Argentina MerVal - - Colombia IGBC 12857.43 0.02 Currencies Latest Daily % change Brazil real 4.1446 0.59 Mexico peso 19.1765 0.09 Chile peso 709.64 0.25 Colombia peso 3433.7 0.43 Peru sol 3.3458 0.10 Argentina peso 58.3400 -0.03 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Nick Macfie)

EMERGING MARKETS-EM stocks end 6-day winning run, lira jumps on ceasefire deal

18 Oct 2019

Oct 18 Emerging market stocks ended a six-day winning streak on Friday as dismal data from China reinforced worries over global growth, though the lira jumped sharply after Turkey agreed a ceasefire deal in Syria that could stave off further U.S. sanctions.

EMERGING MARKETS-Dollar doldrums lift Latin American currencies

17 Oct 2019

(Updates market prices) By Susan Mathew and Sruthi Shankar Oct 17 Most Latin American currencies were supported by a weak dollar on Thursday after the British government and the European Union agreed on a long-awaited Brexit deal, although Brazil's Bovespa stock index broke a six-day winning streak. The dollar fell sharply against the euro on the Brexit deal, spurring gains in most emerging market currencies even as Prime Minister Boris Johnson still faces a knife-edge vote in parliament on Saturday to get it approved. The Colombian peso and the Chilean peso gained 0.2% and 0.7%, respectively, while the Mexican peso held steady after a six-day run of gains. Mexico's President Andres Manuel Lopez Obrador vowed to increase wages and funding for the implementation of labor reforms, part of a campaign to convince U.S. Democratic lawmakers to ratify a new North American trade deal. The Colombian peso recovered from early lows following news Congress approved a 2020 government budget of 271.7 trillion pesos ($78.7 billion) on Wednesday, hours after the top court rolled back a tax reform proposal. The government now has to pass a new law. Morgan Stanley analysts had warned risk premia would increase in Colombian assets if the law was overturned. "With low approval ratings and limited time, the next few weeks should be challenging for the current administration and volatility in local assets will likely increase." "Additionally, local elections on October 27 are likely to add further noise to any potential upcoming Congressional debates around the law, suggesting further downside risks around the new approval process," Morgan Stanley said. The Brazilian real dipped 0.4%, continuing its slide from earlier this week after weak inflation data prompted bets of more interest rate cuts by the central bank. Brazilian stocks also edged lower, dragged down by shares in banks and oil firm Petrobras. Key Latin American stock indexes and currencies at 1951 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1028.69 0.45 MSCI LatAm 2704.90 -0.15 Brazil Bovespa 104969.47 -0.43 Mexico IPC 43421.82 -0.27 Chile IPSA 5172.31 0.43 Argentina MerVal 31833.20 3.492 Colombia IGBC 12872.70 0.17 Currencies Latest Daily % change Brazil real 4.1680 -0.35 Mexico peso 19.1990 0.01 Chile peso 711.25 0.71 Colombia peso 3448.5 0.23 Peru sol 3.349 0.39 Argentina peso (interbank) 58.3150 0.06 (Reporting by Susan Mathew and Sruthi Shankar in Bengaluru; Editing by Chizu Nomiyama)

EMERGING MARKETS-Dollar doldrums lift Latin American currencies

17 Oct 2019

By Susan Mathew Oct 17 Latin American currencies rose on Thursday, with the Mexican peso scaling a 2-1/2 month high, as a euro rally triggered by a Brexit deal added to the dollar's woes. Britain and the European Union said they had clinched a deal for a British exit from the bloc, more than three years after Britons voted for it in a referendum. Though it still faces hurdles, including opposition from Northern Ireland's Democratic Unionist Party (DUP), the Brexit deal propelled the euro 0.5% higher. That hit the dollar, already in the doldrums after weak U.S. retail sales on Wednesday and manufacturing data on Thursday dimmed outlook for the world's biggest economy and raised bets of an interest rate cut. Brazil's real strengthened 0.4%, and Chile's peso rose 0.7%, while Mexico's peso gained 0.2%. Brazil's treasury secretary Mansueto Almeida told a news channel that Brasilia's auction of oil prospecting rights may reduce the government deficit in 2019 to below 100 billion reais ($24.1 billion). However, Colombia's peso dropped to a three week low after Congress approved a 2020 government budget of 271.7 trillion pesos ($78.7 billion) on Wednesday, hours after the top court rolled back a tax reform proposal. The government now has to pass a new law. Morgan Stanley analysts had warned risk premia would increase in Colombian assets if the law was overturned. "With low approval ratings and limited time, the next few weeks should be challenging for the current administration and volatility in local assets will likely increase." "Additionally, local elections on October 27 are likely to add further noise to any potential upcoming Congressional debates around the law, suggesting further downside risks around the new approval process," Morgan Stanley said. Regional stocks also rallied, taking MSCI's index of Latam shares to an over two-month high, to move in line with the broader EM index and Wall Street. Brazilian stocks rose to a one month high, led by shares of homebuilder Cyrela Brazil Realty after its quarterly operating figures beat expectations. The index is on course for a seventh straight session of gains, which would be its longest winning streak since a nine-session run in February last year. Key Latin American stock indexes and currencies at 1420 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1030.20 0.6 MSCI LatAm 2730.65 0.8 Brazil Bovespa 105423.33 0.2 Mexico IPC 43654.30 0.27 Chile IPSA 5167.33 0.33 Argentina MerVal 30794.39 0.114 Colombia IGBC 12860.27 0.08 Currencies Latest Daily % change Brazil real 4.1330 0.50 Mexico peso 19.1429 0.31 Chile peso 711.82 0.63 Colombia peso 3467.02 -0.30 Peru sol 3.3498 0.36 Argentina peso 58.3000 0.08 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alexander Smith)

EMERGING MARKETS-EM stocks rise on trade optimism; Turkish lira holds steady

17 Oct 2019

* Lira awaits outcome of top-level U.S.-Turkey meeting over Syria

EMERGING MARKETS-Brazil's real recovers, but most Latam currencies weaken

16 Oct 2019

By Susan Mathew Oct 16 Latin American stocks and currencies were mixed on Wednesday amid fresh strains in the China-U.S. relationship, with Brazil's real recovering slightly from two-week lows hit last session. China said it resolutely opposed new measures related to pro-democracy protests in Hong Kong passed by the U.S. House of Representatives and urged lawmakers to stop interfering. "We believe that the market should focus less on this (China reaction to the legislation) and monitor the willingness from both sides to reach a trade deal," Morgan Stanley analysts wrote in a note. Brazil's real rose 0.2% and the Mexican peso gained 0.1%, while most other regional currencies fell against a steady dollar. Technicals show that Mexico's peso is on the cusp of a much bigger rally. Wall Street fell and stock markets in Brazil and Chile followed. Those in Colombia and Mexico gained. In Brazil, a corruption probe was launched by the police on Tuesday into the head of President Jair Bolsonaro's right-wing Social Liberal Party (PSL) Luciano Bivar. The widening investigations threatens to slow progress on the economic agenda. A second round of voting by the Senate on a crucial tax reform is expected next week. In Mexico, the Senate on Tuesday approved a controversial constitutional change that would give the public a chance to vote again to either retain or remove a president halfway through a six-year term. Critics say the vote would let leftist Andres Manuel Lopez Obrador put himself at the centre of the campaign for mid-term elections for the lower chamber of Congress, due to be held around 2021. The peso had whipsawed when Lopez Obrador won elections https://www.reuters.com/article/us-mexico-election/mexican-lopez-obrador-wins-historic-election-landslide-for-left-idUSKBN1JR15F in July last year. The Colombian peso slipped 0.2%. Morgan Stanley analysts are watching for a ruling this week by Colombia's constitutional court on the legality of a financing law that was approved late year. "While our base case does not incorporate a dissolution of the law, such a measure would be a net negative for local assets, in our view," they said. "Although removing the law would likely lead to a small increase in revenues next year... the negative growth and investor confidence implications would likely be a bigger driver," they said, adding that the ensuing uncertainty could lead to rating downgrades. Key Latin American stock indexes and currencies at 1502 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1022.96 0.36 MSCI LatAm 2685.00 -0.59 Brazil Bovespa 104035.17 -0.43 Mexico IPC 43511.62 0.62 Chile IPSA 5133.73 -0.46 Argentina MerVal 30969.69 -1.162 Colombia IGBC 12867.08 0.07 Currencies Latest Daily % change Brazil real 4.1720 0.18 Mexico peso 19.2140 0.11 Chile peso 718.58 -0.51 Colombia peso 3457.55 -0.22 Peru sol 3.3698 -0.11 Argentina peso 58.3400 -0.10 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Nick Macfie)

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