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(Bloomberg) -- Emerging markets rebounded as central banks including those of Indonesia and Mexico signaled commitment to support their currencies. Signs of progress in resolving U.S.-China trade frictions bolstered riskier assets later in the week.
BRASÍLIA—Brazil’s president-elect has put together a team of fiscal hawks to lead the economy, winning cautious approval from markets worried about the country’s ballooning debt. Jair Bolsonaro’s designated economy minister, Paulo Guedes, on Thursday proposed U.S.-trained economists Roberto Campos Neto, 49, to lead the central bank and Mansueto Almeida, 51, to stay on as head of the national treasury. Earlier this week the president-elect said former Finance Minister Joaquim Levy, 57, will lead Brazil’s large development bank, known as BNDES, the main source of funds for much-needed infrastructure projects in the country, but which until recently has also been a burden for taxpayers.
Latin American currencies gained on Thursday, with Mexico's peso firming 0.9 percent as the country's central bank made hawkish comments after an interest rate hike and warned that the incoming government's ...
Latin American currencies were on track to snap a six-session losing run on Wednesday, with the dollar tepid after the release of U.S. consumer inflation data. Mexico's peso and stocks managed to gain ...
Latin American stocks fell on Thursday as Mexican stocks saw their biggest daily drop in seven years after a senator from the incoming party presented a proposal to stop banks from charging commissions ...
Latin American currencies were steady against a strong dollar on Thursday ahead of the U.S. Federal Reserve's meeting, while stocks rose mirroring counterparts around the globe. The dollar's strength was ...
Latin American currencies recorded meager gains on Monday as a weaker dollar helped overcome caution ahead of U.S. congressional elections. Concerns that a strong showing by Democrats on Tuesday would ...
Apple’s poor forecast hit tech-heavy indexes, while Treasuries declined after U.S. hiring rebounded more than forecast in October. The index pared about half of Friday’s loss that reached as much as 1.5 percent after President Donald Trump said he thinks the U.S. will reach a trade deal with China.
The U.K. showed early in this decade that it is more prone to inflationary pressure than other leading developed economies, as the pass-through from the sharp depreciation in sterling that accompanied the financial crisis drove up consumer prices. One is, of course, Brexit. Mark Carney, the governor of the Bank of England, has made clear that the bank must “prepare for the worst,” which would be a “no-deal” Brexit in which the U.K. suddenly exited the EU in March with no clear arrangement to follow.
The benchmark equity index Ibovespa is up more than 9 percent in October, helped by less political risk and expectations the administration of president-elect Jair Bolsonaro will push measures to tackle the country’s fiscal woes. Bolsonaro, a former Army captain, beat his leftist rival Fernando Haddad on Oct. 28 with 55 percent of the vote. The Ibovespa posted the best global performance among 94 indexes over the past month, gaining 18 percent in U.S. dollar terms and 9 percent in local currency terms, according to data compiled by Bloomberg.
Jair Bolsonaro, the far-right former Army captain who won Brazil's presidential weekend election, said on Monday he would press ahead with loosening gun laws this year and planned to visit Washington D.C. after a friendly call with U.S. President Donald Trump. Investors were quick to cheer Bolsonaro's victory, sending Brazil's benchmark Bovespa stock index to an all-time high in early trading before stock prices fell as traders booked profits following a sharp rally this month. Markets had surged on Bolsonaro's ascent in opinion polls, as he pledged to quickly close Brazil's gaping budget deficit and privatize state firms.
Because of Brazil's unpredictable nature, Andean Capital CEO Dan Osorio is waiting to see how the president-elect of Latin America's largest economy will lead beginning in January. "As my Brazilian friends and colleagues tell me, Brazil is not for beginners, so predicting is far from easy," says Osorio. Far-right candidate Jair Bolsonaro won with 55 percent of the vote in Brazil's presidential election on Sunday.
It could be a signal that traders are looking for more evidence that Bolsonaro will actually pursue the economic moves his campaign promised, and investors salivated over, even if some aren’t popular with most Brazilians. “There’s a lot to do,” said Will Pruett, a Boston-based money manager at Fidelity who runs a $450 million Latin American equities fund. The Ibovespa and the real posted the world’s biggest gains over the past six weeks as investors started to price in a victory for the former army captain over Fernando Haddad of the Workers’ Party, which investors despise for what they see as economic blunders over the past decade.
Brazil’s next president pledged to trim the deficit, pay down debt and reduce the size of government after results showed him cruising to victory over Fernando Haddad of the left-wing Workers’ Party. State-controlled oil producer Petroleo Brasileiro SA added 1.2 percent, and sovereign bonds climbed. The comments from Bolsonaro should tamp down on any skepticism that he wasn’t fully committed to pension and tax overhauls -- which lingered since the candidate himself often professed an ignorance when it came to economics -- pleasing investors who had abandoned Latin America’s largest economy over the past several years as fiscal accounts deteriorated.
Brazilian shares are set to surge on Monday after Jair Bolsonaro, a former army captain, became the president of the largest economy in Latin America.
An exchange-traded fund from Japan that follows Brazil’s Ibovespa stock index will be the first security to watch when official results from the runoff ballot emerge, followed by a fund in Singapore that tracks a separate index of Brazilian equities. Brazil’s top currency forecasters say there could be a short-lived rally if the outcome is confirmed, while some stock pickers see a massive rally ahead for the country. When European markets open, euro- and pound-denominated bonds issued by the government and big Brazilian companies could be an option for investors.
Barring an upset, Jair Bolsonaro, 63, will win the presidency after a divisive campaign that encompassed his stabbing, an onslaught of fake news and the imprisonment on corruption charges of former president Luiz Inacio Lula da Silva, who had been the front-runner. Lula’s successor, Fernando Haddad, 55, has largely failed to shake off public anger over his Workers’ Party’s record of graft. Antonio Henrique, a 52-year-old bank employee in Rio de Janeiro, said Sunday that he’s voted for the Workers’ Party in every election since the 1980s, but crime, revelations of corruption and economic recession have him voting this time for Bolsonaro instead.
The iShares MSCI Brazil ETF (EWZ) — which tracks Brazilian shares — has skyrocketed more than 18 percent this month, while global shares are down 9 percent. Far-right candidate Jair Bolsonaro triumphed over leftist Fernando Haddad in national elections, and investors will be watching to see if the controversial new administration delivers on economic and budgetary promises. Global stocks have taken a beating this month, but one surprising market has bucked the overall negative trend: Brazil .
Analysts are predicting massive gains over the next 12 months on the back of Jair Bolsonaro’s likely win in this weekend’s presidential runoff, saying that he could send stocks to unprecedented highs if he aggressively pursues measures to shore up government finances. The right-wing lawmaker and his economic adviser, Paulo Guedes, are seen as godsends by investors enamored of their promises to rein in budget deficits, remove restrictions on the massive agriculture industry and privatize some state-owned companies. UBS Group AG strategists Sambuddha Ray and Alan Alanis are emblematic of the euphoria.
MSCI's index of Latin American stocks recovered from a 2.7 percent fall to a near two week-low to trade 0.8 percent lower. "There is a recovery and Mexico is probably the best proxy for that," said Sacha Tihanyi, deputy head of emerging markets strategy at TD Securities. "It is correlated with that move ... all that risk sentiment that hurt initially and then turned things around, which is probably a good description of the factor at play today." Mexico's equity market also rebounded a bit from a 1.5 percent drop to a four-month low during the session to trade 1.1 percent lower.
Brazil's central bank chief Ilan Goldfajn is preparing to step down by the end of the year, Bloomberg reported on Thursday, depriving the country's incoming president of a widely respected steward of the economy. The central bank declined to comment on the report, which cited two people who spoke to Goldfajn about the matter and who asked to remain anonymous. Bloomberg added that far-right presidential front-runner Jair Bolsonaro, who looks likely to be elected in an Oct. 28 runoff vote, was mulling several candidates for the central bank post.