|Day's Range||94,698.76 - 96,724.71|
|52 Week Range||69,069.00 - 100,439.00|
Brazilian financial markets fell in highly volatile trading on Thursday as investors feared former President Michel Temer's arrest on graft charges could slow proposed pension reform seen as critical to injecting life into a tepid economic recovery. Temer, who left office on Jan. 1, is accused of leading a "criminal organization" that took in 1.8 billion reais ($472 million) in a bribery and kickback scheme related to the construction of a nuclear power complex. Brazil's 10-year bond yield was up more than 20 basis points at 8.93 percent and the currency, the real, down over 1 percent at one point.
Latin American currencies weakened on Thursday as the dollar soared, while Brazil shares fell sharply following the arrest of a former president of the country on graft charges. A slump in the dollar's ...
SAO PAULO/BRASILIA, March 21 (Reuters) - Brazil's former President Michel Temer was arrested on Thursday in "Operation Radioactivity," a probe of alleged graft in the construction of a nuclear power plant, threatening to delay debate over the government's ambitious fiscal reforms. Temer was president from 2016 to 2018, taking office after the impeachment of Dilma Rousseff, who he served under as vice president for six years. Prosecutors alleged that Temer was the leader of a "criminal organization" that took in 1.8 billion reais ($472 million) in bribes or pending future kickbacks as part of numerous schemes, including one related to the Angra nuclear power plant complex on the Rio de Janeiro coast and other state firms.
Clearly, investors were overjoyed with the prospect that the Fed had their backs. The concern here is that the Fed’s moves will only serve to suppress market rates, putting further pressure on the already razor-thin difference between the short-term rates banks pay on their own borrowings and the long-term rates they charge lenders. In the banking business, this is known as the net interest margin.
Brazil's military would average just 1 billion reais ($265 million) in net savings per year over the next decade under an austerity proposal from the Economy Ministry unveiled on Wednesday, with higher pay consuming most pension savings. The bill is the final piece of a social security overhaul proposed by President Jair Bolsonaro, a former army captain, aimed at saving over 1 trillion reais in a decade. Lawmakers have said they could not debate his pension bill, first presented a month ago, without details of his plans for the armed forces — and even Bolsonaro's allies quickly questioned whether the military personnel were giving up enough.
Most Latin American stocks fell on Tuesday as investors digested mixed signals regarding the progress in U.S.-China trade negotiations, while regional currencies awaited the outcome of a U.S. Federal Reserve ...
Not only that, stocks are on track for their best quarter since soaring 15 percent in the July through September period of 2009. “The pain trade for stocks is still up,” Michael Hartnett, the chief investment strategist at Bank of America, wrote in research note Tuesday. The firm’s closely monitored monthly investor survey found that allocations are just a net 3 percent “overweight” to global equities, the lowest level since September 2016.
A rally in equities sputtered out after a report that U.S. and Chinese negotiators remain at odds on aspects of their current trade talks. Treasury yields narrowed and Texas crude declined. The S&P 500 Index ended the session little changed Tuesday on word that Trump administration officials are concerned that China is pushing back against U.S. demands.
“It’s difficult to see another story as positive as Brazil’s in the region,” said Emy Shayo, JPMorgan Chase & Co.’s head of Latin America equity strategy. The bank sees a “virtuous cycle” amid tighter fiscal policy and easing monetary policy, a combination that “attracts external capital and helps companies to recover a lot of what they lost in terms of profits," according to Shayo.
Indexes that measure the cost to protect both investment- and speculative-grade U.S. corporate bonds from default fell to their lowest levels since October, a sign of optimism about borrowers’ ability to pay their debts. The credit-focused investment firm announced that it was selling a 62 percent stake to Brookfield Asset Management in a deal worth about $4.7 billion. Well, for one, Oaktree’s chairman and co-founder is the legendary Howard Marks, who built his fortune as a vulture investor in distressed debt.
Breakeven rates on two-year Treasuries — a measure of what bond traders expect the rate of inflation to be over the life of the securities — has risen to the highest since May. In addition, the difference in yield between bonds due in 10 years and longer-term debt due in 30 years – a part of the curve that’s less influenced by Fed policy – is the widest since 2017. To be sure, no one is calling for runaway inflation. At 1.90 percent, the two-year breakeven rate is below the Fed’s 2 percent inflation target.
Reform of Brazil's social security system will deliver savings of 690 billion reais ($184 billion) over the next decade, according to the average estimate of a Morgan Stanley client poll. Investors remain "very optimistic" on the prospects for pension reform, with 93 percent expecting Congress to approve some version of the bill this year, the U.S. investment bank's survey of nearly 100 clients published late on Tuesday showed. Some 29 percent of those polled expect savings of between 700 and 800 billion reais, and 18 percent forecast savings of more than 800 billion ($214.3 billion).
Investors may soon recalibrate their optimism over Brazilian President Jair Bolsonaro, analysts say.
Stocks in Brazil received a modest boost on Thursday from corporate earnings and with pension reforms in focus but losses in the energy and material sector capped gains, while Latin American currencies weakened against a steady U.S. dollar. Shares on the Bovespa index in Sao Paulo recovered from an over 1 percent drop in the previous session as market participants were still trying to understand the detailed text of pension reforms presented to Congress on Wednesday. In earnings, Brazilian steelmaker Companhia Siderurgica Nacional was the biggest gainer after it posted stellar numbers for the fourth quarter by benefiting from higher international prices amid a trade spat between the United States and China.
Brazilian President Jair Bolsonaro delivered his proposed pension overhaul to Congress on Wednesday, a plan to save over 1 trillion reais ($270 billion) in a decade, which raised doubts about whether lawmakers would pass a package of that scale. The social security bill is the cornerstone of the new president's effort to close what most economists call an unsustainable public deficit and boost a weak economic recovery. The government pledged to present changes soon for military pensions that would increase the savings, a delay that also raised a red flag among some legislators.
The Australia dollar is usually one of the major beneficiaries of a global “risk on” rally in markets like the one this year given its close economic ties to China. The latest decline came as Reserve Bank of Australia Governor Philip Lowe shifted to a neutral policy outlook as he acknowledged increased economic risks at home and abroad. Indeed, the nation’s economic data has been consistently falling below analysts’ forecasts since the beginning of December as measured by the Citi Economic Surprise Indexes amid a weakening housing market and high consumer debt loads.
Latin American stocks and currencies rallied on Thursday, powered by the U.S. central bank's promise to be patient in hiking interest rates, helping stocks post their best January in 13 years. Markets ...
Latin American stocks rose on Tuesday, outperforming world stocks that struggled to hold gains ahead of keenly awaited U.S.-Sino trade talks, earnings of top technology companies and an impending U.S. ...
Brazilian stocks have become one of Wall Street's favorite destinations for investing this year as investors bet on big changes taking place in Latin America's largest economy.
Brazil stocks scaled an all-time high on Wednesday and the currency firmed, boosted by the country's economy minister reiterating that much needed pension reforms remained the government's top priority, while a weaker dollar helped some other Latin American currencies rise. In Brazil, the real rose 1.3 percent and posted its biggest one-day gain in three weeks, while the benchmark Bovespa index scaled new highs with gains being broad-based. Brazil's economy minister Paulo Guedes told Bloomberg TV that pension reforms are the government's top priority and that more than half of the fiscal deficit will be cut with the reform.