December 9, 2016 / 3:44 PM / 8 months ago

EMERGING MARKETS-Brazil rate futures drop as inflation slows

4 Min Read

By Bruno Federowski
    SAO PAULO, Dec 9 (Reuters) - Yields paid on Brazilian rate
futures fell on Friday after the country reported its slowest
monthly inflation since 1998, consolidating bets on a sharper
interest rate cut next month.
    Consumer prices as measured by the benchmark IPCA index rose
0.18 percent in November from October, below all 29 market
forecasts in a Reuters poll, influenced by falling food prices
and weaker economic activity. 
    Central bank Governor Ilan Goldfajn had said on Wednesday
keeping inflation expectations in check is crucial for the bank
to continue cutting rates and that a weaker-than-expected
recovery could pave the way for a heftier rate cut. 
    According to Reuters calculations, rate future prices
implied a 94 percent chance of a 50 basis point cut at the
central bank's January meeting. 
    Most Latin American currencies strengthened ahead of the
U.S. Federal Reserve policy meeting next week.
    Many traders expect the Fed to raise rates after the
election of Donald Trump to the White House raised concerns that
his plans of heavy spending could trigger price pressures.
    The Mexican central bank is also expected to hike rates in
its meeting next week after the country's annual inflation
reached its highest in two years in November.
    The peso was nearly flat on the day after weakening
about 15 percent so far this year.
   
    Key Latin American stock indexes and currencies at 1530GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                   Latest             
 MSCI Emerging Markets               877.34    -0.23    10.73
 MSCI LatAm                         2352.25     1.24    26.97
 Brazil Bovespa                    60941.92     0.44    40.58
 Mexico IPC                        46626.76     0.57     8.49
 Chile IPSA                         4255.48     0.73    15.63
 Chile IGPA                        21151.52     0.36    16.53
 Argentina MerVal                  17196.77    -0.22    47.29
 Colombia IGBC                      9872.85     0.76    15.51
 Venezuela IBC                     36350.63    -0.49   149.18
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                                      
                                     Latest           
 Brazil real                         3.3616     0.62    17.41
 Mexico peso                        20.3000     0.20   -15.12
 Chile peso                           651.5     0.51     8.93
 Colombia peso                      2997.43     0.15     5.73
 Peru sol                             3.397     0.18     0.50
 Argentina peso (interbank)         15.9950    -0.50   -18.83
                                                      
 Argentina peso (parallel)            16.25    -0.43   -12.18
                                                      
 

 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below