|Day's Range||29,665.26 - 30,561.27|
|52 Week Range||22,484.40 - 44,470.76|
Oil prices surged nearly 20% at one point on Monday after the attack in Saudi Arabia, the world's biggest oil exporter, halved the kingdom's production. Trump also said the United States was "locked and loaded" for a potential response to the strikes, and that Iran appeared responsible, however, raising tensions. While currencies of some oil-exporters benefit from the steep rise in oil prices, concerns that an oil supply shock and geopolitical tensions would damage an already fragile global economy sapped investor demand for riskier assets.
MSCI's index of Latin American stocks rose 1.3%, holding near a one-month high, mirroring gains across global stock markets.
BUENOS AIRES/MADRID (Reuters) - Argentina's likely next President, opposition front-runner Alberto Fernandez, laid out his populist credentials during a visit to Madrid on Thursday, saying local Argentine interests would trump those of creditors and energy investors. In comments that followed a speech at the Spanish parliament, he indicated he would, if elected, take a tougher stance on international access to Argentina's vast Vaca Muerta shale reserves, a magnet for investment. Fernandez, a moderate Peronist running alongside populist ex-leader Cristina Fernandez de Kirchner, added he was committed to meeting debt obligations as long as it did not harm Argentines.
BUENOS AIRES/MADRID, Sept 5 (Reuters) - Argentina's likely next president, opposition front-runner Alberto Fernandez, laid out his populist credentials during a visit to Madrid on Thursday, saying local Argentine interests would trump those of creditors and energy investors. In comments that followed a speech in the Spanish parliament, he indicated that, if elected, he would take a tougher stance on international access to Argentina's vast Vaca Muerta shale reserves, a magnet for investment. Fernandez, a moderate Peronist running alongside populist ex-leader Cristina Fernandez de Kirchner, added he was committed to meeting debt obligations as long as it did not harm Argentines.
MSCI's index of Latin American currencies came off their one-year lows to move 0,8% higher as weak manufacturing data in the U.S. put the greenback on the back foot. Brazil's real and Mexico's peso led gains, each up nearly 1%, getting an additional boost from higher oil prices. Chile's peso was only marginally higher, underperforming its regional peers after the central bank cut its key interest rate by 50bps on Tuesday as inflation levels continue to drag for the world's top copper exporter.
The peso opened sharply stronger, up 6% officially against the dollar, marking Wall Street's first reaction to Argentina's new currency controls after a long holiday weekend in the United States. "The black market rate is lower then the official suggesting that there is still some pressures there," said Edward Glossop, Latam economist at Capital Economics. "History suggests that capital controls do sometimes help to alleviate pressure on currencies in the near term, but over the longer term when people start finding loopholes in the system.
Argentina's peso surged on Tuesday, pumped up by Wall Street traders cheering President Mauricio Macri's capital controls that are aimed at protecting the beleaguered currency. The peso closed 5.39% higher at 55.98 per U.S. dollar, traders said, its strongest level in a week after a near record low close on Friday. Traders said the central bank intervened to support the peso in the afternoon by selling dollars from its reserves.
(Bloomberg) -- Argentina’s central bank is trying to stem investor panic and stabilize the mutual fund industry after many of the country’s biggest funds suspended investor withdrawals in the wake of the government’s default on $7 billion of local debt.The bank offered to buy local notes held by the funds, providing liquidity that they in turn can use to meet a surge in investor redemption requests. The rush for the exits was so intense Thursday after the cash-strapped government announced it was forcing local bond investors to accept longer maturities that more than a dozen mutual funds halted withdrawals.The payment delays and plans to seek a “voluntary” reprofiling with holders of longer-term debt are part of a series of dramatic measures announced this week by President Mauricio Macri’s administration to staunch capital outflows and stabilize the peso amid a deepening financial crisis. Late Thursday, S&P Global Ratings said the forced extension of local bond maturities constituted a “selective default.”Overseas bonds extended their decline Friday, with notes due in 2028 sinking 1.9 cent to a record 38.3 cents on the dollar and bringing the monthly loss to more than 40 cents. The peso slumped 2.2%, extending its August drop to 26%.Argentine assets sold-off across the board after an Aug. 11 primary election -- which acted as something of a dry run for the actual Oct. 27 vote -- showed that Macri, a free-market advocate, was trailing the leftist candidate Alberto Fernandez by a wide margin.Investors withdrew more than 70 billion pesos ($1.2 billion) from money-market mutual funds on Thursday, equivalent to almost 10% of the industry’s total assets, according to preliminary data compiled by local consulting firm 1816 Economia & Estrategia. Money-market funds were generally open to redemptions on Thursday, in contrast to those that focused on short-term notes that didn’t allow trading.Jorge Garbero, an investment adviser at Banco Nacion in Buenos Aires, said his phone was ringing nonstop on Thursday. The calls came in, one after another, from mutual fund clients desperate to pull out their money.“It’s been a deluge,” Garbero said while grabbing lunch downtown.With the economy mired in a deep recession, inflation soaring and most investors unwilling to roll over short-term debt, Macri had little choice but to take drastic measures in the run-up to an election he will almost certainly lose.It’s unclear how successful Macri will be with his bid to ratchet back the financial pressure his administration faces. Argentina is looking to delay payments on $7 billion of short-term bills coming due by year-end, $20 billion of local-law bonds and $30 billion of foreign-law bonds.Foreign-currency reserves have plunged $10 billion over the past month, including a decline of about $900 million Thursday, to less than $60 billion now.S&P cut Argentina’s foreign and local debt rating to “selective default” late Thursday, saying that the plan to unilaterally extend maturities on short-term bills “constitutes default under our criteria.”Macri took office less than four years ago amid a wave of optimism for South America’s second-largest economy. He settled creditor lawsuits that had dragged on more than a decade and returned to global capital markets with a splash, selling bonds that wouldn’t mature for 100 years.But obstacles, from persistent inflation he couldn’t tame to a global trade war, thwarted his free-market goals. An expected economic surge never materialized, leaving the government with a debt load that’s now too big for it to handle.Garbero, the investment adviser at Banco Nacion, feels fairly well protected from the economic tumult. He doesn’t have much in the way of savings, so isn’t concerned about a devaluation. And, in fact, since he has peso-denominated debts, a bout of inflation and a weaker currency would actually make it easier to pay back his obligations.\--With assistance from Philip Sanders, Justin Villamil and Carolina Millan.To contact the reporters on this story: Ignacio Olivera Doll in Buenos Aires at email@example.com;Jonathan Gilbert in Buenos Aires at firstname.lastname@example.org;Aline Oyamada in Sao Paulo at email@example.comTo contact the editors responsible for this story: Daniel Cancel at firstname.lastname@example.org, ;David Papadopoulos at email@example.com, Brendan Walsh, Julia LeiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Brazilian real edged up 0.15%, struggling to recover from its lowest level this year despite data showing Brazil's economy rebounded strongly in the second quarter after having shrunk in the first, meaning Latin America's largest economy comfortably avoided falling back into recession. The currencies of Colombia and Mexico were largely flat as the dollar firmed against a basket of major currencies after data showed the strongest growth in U.S. consumer spending in 4-1/2 years even as economic growth slowed in the second quarter. In response, Argentina's peso fell 2.6% to 59.65 per dollar and bond prices headed to a record low, while its country risk soared to levels not seen since 2005.
Standard & Poors announced on Thursday that it was slashing Argentina's long-term credit rating another three notches into the deepest area of junk debt, saying the government's plan to "unilaterally" extend maturities had triggered a brief default. The ratings agency said it would consider Argentina's long-term foreign and local currency issue ratings as CCC- "vulnerable to nonpayment" - starting on Friday following the government's Wednesday announcement that it wants to "re-profile" some $100 billion in debt. The plan, which requires congressional approval, has stoked fears of a full-blown financial crisis in Latin America's third largest economy, two months before business-friendly President Mauricio Macri's handling of the economy is tested in a general election against a leftist rival.
Fact is stranger than fiction. But before we talk about the latest facts, imagine this fictional scenario ... The Dow Jones Industrial Average plunges 10,448 points ... in a single session. The U.S. dollar ...
(Bloomberg) -- Alberto Fernandez’s victory in the August 11 primary elections has led some of Argentina’s private banks to reconsider their investment strategy, shortening investment terms to just one day, a change that reflects the uncertainty and volatility prevailing in the South American nation’s markets.Last week, the banks opted to invest surpluses of money in instruments that pay a lower rate than the Leliqs, the notes issued by the central bank, because the former mature in one day instead of seven, according to data from the daily monetary operations report of the bank, known as BCRA. The stock of the BCRA’s so-called “passive passes” (repo) reached ARS 61.7 billion ($1.12 billion) in the last four days, or 13 times the average of the last 90 days.Argentina’s central bank pays a 63% yield for this repo, less than the 75% offered by Leliq. “The banks are seeking to have greater flexibility to be prepared for an eventual withdrawal of deposits in pesos,” says Diego Chameides, head strategist at Banco Galicia, Argentina’s third-largest bank by net worth, according to the BCRA. “They relinquish some rate but manage to have immediate liquidity” in the case of any urgency.The change in the investment strategy comes after a week of turbulence in the markets following the electoral setback endured by President Mauricio Macri.Since the vote, the Argentine peso has depreciated 17.2%, the S&P Merval stock index dropped to half its dollar value and the country risk doubled to 1,863 basis points. Savers withdrew 3.7% of total deposits in U.S. dollars in the three days following the election (almost $1.2 billion, according to the latest official data) and 2.8% of certificate deposits in pesos (ARS 35 billion).Investing in Leliq seems less attractive to banks, despite offering 12 percentage points more in the rate than 1-day repos. The stock of these notes held by banks remains close to ARS 1.3 trillion, ($23 billion), according to the most recent official data, below the level before the August 11 election.\--With assistance from Jose Orozco.To contact the reporter on this story: Ignacio Olivera Doll in Buenos Aires at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrea Jaramillo at email@example.com, ;Carolina Millan at firstname.lastname@example.org, Jose Enrique Arrioja, Jose OrozcoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investors on Tuesday sought traditional safe havens, including the Japanese yen and U.S. Treasuries, even as there were signs that more economic stimulus was on its way, as markets focused on concerns over a global deceleration. The prospect of new elections in Italy after the resignation of Prime Minister Giuseppe Conte added to global uncertainties, but Italian markets had been jittery over infighting within the coalition and Italian sovereign bond yields fell after the announcement. U.S. President Donald Trump said his administration was looking to cut some taxes but that he was not talking about doing anything imminently.