Aaron Saldanha

European shares hit by U.S. tariff threat, growth jitters

15 Apr 2019

(Corrects paragraph 17 in April 9 story to "jumped as much as 7 percent" from "jumped about 40.2 percent")

EMERGING MARKETS-Most Latam currencies firm, Brazilian assets slip

12 Apr 2019

By Aaron Saldanha April 12 Most Latin American currencies firmed on Friday against a tepid dollar on resurgent risk sentiment, with rising oil prices supporting firmness among the region's net oil exporters' currencies. Oil-related currencies remained attractive, Morgan Stanley strategists wrote in a note, observing that the out-performance of high-yielding emerging market currencies corresponded to real U.S. yields giving back some ground they had recently gained. Investors' appetite for riskier currencies got a boost after data showed China's exports rebounded in March. China purchases a lot of natural resources from Latin America, so growing Chinese exports could boost demand for local currencies, analysts said. Mexio's peso and stocks each rose 0.4%. Santander Mexico shares rose 12.7% after a buyback announcement. The peso is one of the developing world's most traded currencies, favored by investors for its liquidity and relatively high interest rates. Chile's peso gained 0.5% following rising prices of copper, the country's top export. Argentina's peso firmed, while stocks fell half a percent. Colombia's peso firmed 0.6 percent. A significant portion of the country's exports are related to oil. Brazil's real dipped 0.1 percent, while Sao Paulo-traded stocks slipped 0.1 percent, weighed down by losses mainly in the energy sector. A 1% jump in oil prices was insufficient to buoy state-run oil firm Petroleo Brasileiro SA (Petrobras), whose common shares and preferred shares slid 5.3 % and 4.2%, respectively. Petrobras will postpone a diesel price hike, following pressure from Brazilian President Jair Bolsonaro, according to a person familiar with the matter. The news spooked investors in the energy giant, whose preferred shares hit their lowest in more than a month before recovering marginally. Itausa Investimentos Itau SA rose 0.4%. The investment firm and CVC Capital Partners are among the groups interested in an LPG distribution unit Petrobras has put on the block, two sources said. Shares of miner Vale SA rose 1.4% after Barclays raised the price target on the iron ore giant's U.S.-listed shares. Latin American stock indexes and currencies at 1426 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1091.43 0.36 MSCI LatAm 2798.37 -0.32 Brazil Bovespa 94709.22 -0.05 Mexico IPC 44774.10 0.44 Chile IPSA 5254.12 -0.01 Argentina MerVal 31354.65 -0.46 Colombia IGBC 13165.53 0.08 Currencies daily % change Latest Brazil real 3.8607 -0.15 Mexico peso 18.7671 0.31 Chile peso 660.7 0.65 Colombia peso 3105.09 0.42 Peru sol 3.292 0.18 Argentina peso (interbank) 42.3000 1.06 (Reporting by Aaron Saldanha in Bengaluru; Editing by David Gregorio)

EMERGING MARKETS-Turkish lira leads declines in emerging market currencies

12 Apr 2019

April 12 Turkey led declines in most emerging market currencies on Friday, with the lira sliding as investor disappointment over the government's economic reform plan unveiled this week left a pall over the currency.

EMERGING MARKETS-Latam FX hit by strong dollar, stocks drop

12 Apr 2019

(Recasts throughout, updates prices, adds market strategist's quote) By Aaron Saldanha April 11 Latin America currencies softened on Thursday against a dollar boosted by strong U.S. economic data, while Latin American stocks slid along with their global peers, with equities in Argentina and Brazil racking up the heaviest losses. U.S. producer prices rose by the most in five months in March, strengthening the dollar and setting the stage for Latin American currencies to weaken. MSCI's index of Latin American currencies snapped a four-session winning run, while its Latin American stocks index fell 1.1%. Brazil's house speaker Rodrigo Maia said pension reform that would save 1 trillion reais ($259.40 billion) could be approved in May or June. While government dialogue with Congress has been lacking, he said, it was improving. Investors voted with their feet, however, and the real slid 0.9% on its worst day in about two weeks. "We continue to stay on the sidelines in Brazilian assets, avoiding potential market volatility when pension reform is debated in the special committee and awaiting better entry when the committee appears likely to approve the bill," Dirk Willer, Citi Research's head of emerging market strategy, and Kenneth Lam, emerging markets FX strategist, wrote in a note. Broad-based losses pulled Brazilian stocks 1.3%lower. State-run oil firm Petroleo Brasileiro SA saw its common shares and preferred shares fall 1.3% and 2.7%, respectively, pressured by sliding oil prices. Companhia Energetica de Minas Gerais-CEMIG fell 1.4%. The police raided the power firm's headquarters, saying they was investigating 40 million reais siphoned out of CEMIG. Shares of a CEMIG unit police said was linked to the alleged scheme, Renova Energia SA, tumbled 4.9 percent. Mexico's peso edged lower and stocks fell 0.7%. Peso trading volumes jumped to about 180% of their average over the past week, Refinitiv Eikon data showed, around the time minutes from the Mexican central bank's March 28 meeting were released. Financial challenges at Mexican state oil firm Pemex could threaten macroeconomic stability, said the minutes of the meeting, at which where the key rate was left at 8.25%. "We highlight that, even though the rate decision was unanimous, one member of the board, Gerardo Esquivel, did not agree with the communiqué, which is unprecedented for Banxico," wrote strategists at Banorte Research, referring to the central bank, Banco de Mexico. Chile's peso fell 0.3% following a dip in the price of copper, the country's top export. Argentina's stocks fell 2% to their lowest closest level since early 2019. The peso firmed, with the central bank raising the rates payable on short-term notes. Colombia's peso weakened 0.8%, while stocks dropped 1%. Oil firm Ecopetrol SA was pulled 2.5% lower by soft oil prices. Latin American stock indexes and currencies at 2059 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1087.49 -0.78 MSCI LatAm 2807.44 -1.14 Brazil Bovespa 94754.70 -1.25 Mexico IPC 44580.06 -0.73 Chile IPSA 5254.48 -0.45 Argentina MerVal 31501.04 -2.03 Colombia IGBC 13155.04 -1.02 Currencies Latest Daily % change Brazil real 3.8590 -0.10 Mexico peso 18.8260 -0.08 Chile peso 665 -0.48 Colombia peso 3118.05 -0.78 Peru sol 3.298 -0.12 Argentina peso (interbank) 42.7000 0.77 (Reporting by Aaron Saldanha in Bengaluru; editing by Grant McCool)

European shares recover, airline stocks zoom on Brexit delay

11 Apr 2019

European shares ground higher on Thursday, buoyed by gains among bank and travel stocks, with risk appetite aided by a European Central Bank official expressing willingness to support the euro zone.

EMERGING MARKETS-Latam FX firms across the board after dovish Fed minutes

11 Apr 2019

(Recasts throughout, updates prices, adds market strategists' quotes) By Aaron Saldanha April 10 Latin America currencies firmed on Wednesday against a tepid dollar after the release of minutes from the U.S. Federal Reserve's March policy meeting supported investors' expectations of a dovish Fed in 2019. The Fed is likely to leave interest rates untouched this year given risks from a global slowdown and uncertainty over trade policies, the minutes showed, providing a reprieve to developing-world assets which fell in 2018 as returns on dollar-based investments rose. Policymakers commenting that the Fed's policy stance could shift in either direction based on incoming data "arguably gave a dovish tone to the minutes overall," Michael Hanson, TD Securities' head of global macro strategy, wrote in a note. "The March FOMC minutes confirmed that a majority of Fed officials did not see any change in policy this year, consistent with the dot plot," Hanson wrote, referring to the depiction of policymakers' expectation of borrowing costs in the future. Mexico's peso tacked on 0.6% in gains, while stocks lost 0.5%, hurt by materials and financials stocks. "The expectations of loose monetary conditions going forward could be the main support for financial markets," wrote strategists at Banorte in Mexico, in a note. Brazil's real firmed 0.7%, while Sao Paulo-traded stocks dropped 0.4%, largely weighed down by losses among the financials and materials sectors. State-run oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares and preferred shares fall 0.6% and 1.3%, respectively. The preferred shares rose as much as 1.4% during the session, with sources telling Reuters that Petrobras would sell more pipelines after the recent success of its 90% divestiture of TAG. Shares of miner Vale SA fell 1.1%. A report said prosecutors are planning to file criminal charges against Vale and its employees over the collapse of a mine-waste dam in January that killed hundreds of people. Chile's peso rose 0.4%, matching the gain in the price of copper, the country's top export. Stocks dipped 0.1%. Argentina's peso firmed while its stocks index was an aberration to the general norm seen on most bourses in the region. The MerVal rose 1.3%, supported by materials and energy stocks. Colombia's peso firmed 0.3%, while equities rose 0.4%. Ecopetrol SA added 0.7%, aided by a 1.4% rise in oil prices. Latin American stock indexes and currencies at 2058 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1096.05 0.24 MSCI LatAm 2839.88 0.2 Brazil Bovespa 95953.45 -0.35 Mexico IPC 44909.14 -0.54 Chile IPSA 5278.00 -0.07 Argentina MerVal 32154.54 1.3 Colombia IGBC 13290.00 0.35 Currencies daily % change Latest Brazil real 3.8243 -0.03 Mexico peso 18.8170 0.60 Chile peso 661.8 0.30 Colombia peso 3093.68 0.25 Peru sol 3.294 0.00 Argentina peso (interbank) 42.9800 1.00 (Reporting by Aaron Saldanha in Bengaluru; Editing by Richard Chang)

European stocks tick up post ECB decision, banks fall

10 Apr 2019

European shares rose slightly on Wednesday as gains across most sectors offset losses among lenders, which were hit by a lack of detail in European Central Bank (ECB) comments after the bank left borrowing costs unchanged.

EMERGING MARKETS-Latam stocks fall with Argentina, Brazil sliding most

10 Apr 2019

(Recasts throughout, updates prices, adds market strategist's quote) By Aaron Saldanha April 9 Most Latin American stock markets fell along with their global peers on Tuesday, with risk appetite in Brazil hit by a lack of progress on pension reform, while wider sentiment was affected by a U.S. threat for tariffs on European Union goods. The International Monetary Fund cut its outlook on the global economy and also for Brazil and Mexico, tarnishing sentiment. Rafael Bevilacqua, chief strategist at independent investment consultancy Levante, said the lack of positive news on the pension reform proposal caused Brazilian stocks to fall, reflecting investors' caution around the proposal's progress. MSCI's index of Latin American stocks fell half a percent, as losses among stocks in index heavyweights Brazil and Mexico exacted a hefty toll. Brazil's real dipped 0.1 percent while stocks slid 1.1 percent, with losses incurred in each sector apart from consumer staples. Common shares and preferred shares of state-run oil firm Petroleo Brasileiro SA (Petrobras) dropped 0.9 percent and 0.3 percent, respectively, tracking lower oil prices. The preferred shares snapped a three session winning run during which time they tacked on about 6.2 percent, buoyed in part by the $8.6 billion divestment of a 90 percent stake in pipeline unit TAG to an Engie-led consortium. Shares of Vale SA fell 2 percent. The miner's own and contract workers in Brumadinho are to join a lawsuit for greater total labor claims against the company, after a dam burst in January led to the deaths of 300 people. Ambev rose 2 percent and was one of the benchmark's few gainers on the day. Credit Suisse said it sees the firm recording a 7 percent rise in beer volumes in Brazil in the first quarter, to go with 12 percent revenue growth. Mexican stocks fell 0.6 percent, distancing themselves from five-month highs on Monday, while the peso currency edged up. Annual inflation in Mexico ticked up slightly in March, data showed, spurred by a jump in gasoline prices that has raised red flags with the government. Argentina's stocks benchmark tumbled 4 percent to reverse the 4.1 percent gain made over the past three sessions. Chilean stocks ticked 0.1 percent higher, while the currency dipped as local demand for foreign exchange overcame support provided by higher prices of copper, the country's top export. . "In Chile, pension reform difficulties have been a headwind to the more positive fundamental story," Ilya Gofshetyn, an analyst with Standard Chartered Bank, told the Reuters Global Market Forum. "Both Chile and Colombia are of course beholden to their respective commodity exports to some degree, Chile more so than Colombia." Colombia's peso firmed 0.4 percent, while stocks slipped 0.1 percent. Oil firm Ecopetrol SA pulled 1.3 percent lower by weak oil prices. Japan's Softbank Group announced the initial executive investment team for the $5 billion technology growth fund for Latin America. Latin American stock indexes and currencies at 2105 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1093.44 0.45 MSCI LatAm 2834.12 -0.52 Brazil Bovespa 96291.79 -1.11 Mexico IPC 45151.63 -0.63 Chile IPSA 5281.78 0.13 Argentina MerVal 31743.38 -4.04 Colombia IGBC 13244.14 -0.07 Currencies daily % change Latest Brazil real 3.8501 0.09 Mexico peso 18.9342 -0.02 Chile peso 663.8 -0.02 Colombia peso 3101.45 0.00 Peru sol 3.294 -0.18 Argentina peso (interbank) 43.3500 0.92 (Reporting by Aaron Saldanha in Bengaluru, Additional reporting by Michael Connor in New York and Stefani Inouye in Sao Paulo; editing by Grant McCool)

EMERGING MARKETS-Latam FX firms versus soft dollar, stocks hit 2-1/2 week peak

09 Apr 2019

(Recasts throughout, updates prices, adds market strategist's quote) By Aaron Saldanha April 8 Latin American currencies firmed on Monday, helped by a soft dollar as global risk appetite rose, while equities in Latin America climbed on gains clocked in each of the region's countries, especially among resource stocks. Demand for the dollar was dented by easing fears of global growth slowing at the start of a week featuring a slew of data due from China, a key buyer of Latin America's resources exports. Chinese inflation and trade data for March is due later this week. "While the market has been expecting better China data, positioning is still light," Dirk Willer, Citi Research's head of emerging market strategy, and Kenneth Lam, emerging markets FX strategist, wrote in a note. "We are positive on Latam FX as the better China sentiment is gathering steam." MSCI's Latin American currencies index gained 0.1 percent, while its index of Latin American stocks was up half a percent, after hitting a two and a half week high earlier in the day. Brazil's real firmed 0.6 percent, while Sao Paulo-traded stocks rose 0.3 percent, largely on gains among materials and energy firms. State-run oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares and preferred shares rise 2.2 percent and 1.6 percent, respectively. Credit Suisse upgraded its rating of Petrobras' U.S.-listed shares and raised its price target to $21. A rise in oil prices to a five-month peak was also a supportive factor to Petrobras. Shares of miner Vale SA rose 2.7 percent, tracking part of a 4.8 percent rise in iron ore prices in Dalian, China. A group of Vale's minority shareholders have proposed an alternative board member to challenge the independent members within the group of 13 candidates presented by the firm's board, newspaper Valor Economico reported. The pressure from minority shareholders reflects skepticism toward Vale's board and management after a mining dam burst in January left about 300 hundred dead. Vale opened talks with prosecutors and victims' families, it said on Monday, with an aim of defining compensation. Meatpacker JBS rose 3.9 percent, helped by HSBC raising its price target on the stock and by strong beef export data. Mexico's peso firmed half a percent, pierced through the 19 peso-per-dollar mark and saw trading volumes at about double their one-week average during trade on the day, as per Refinitiv Eikon data. The currency is one of the developing world's most liquid and is considered by some investors to be a weather vane of trade sentiment. Mexican stocks rose 1 percent on strong showings by financials and consumer staples. Chile's peso rose 0.2 percent, with prices of copper , the country's top export, rising 1.2 percent on news of stimulus measures in China. Chilean stocks gained 0.4 percent. Argentina's peso firmed to pull away from a record closing low clocked on Friday, while local stocks rose 1.3 percent. Colombia's peso firmed 0.3 percent, while local stocks tacked on 1.1 percent, with energy firm Ecopetrol SA riding on the back of higher oil prices to gain 1.9 percent. Key Latin American stock indexes and currencies at 2106 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1088.50 0.31 MSCI LatAm 2849.02 0.54 Brazil Bovespa 97369.29 0.27 Mexico IPC 45436.28 0.99 Chile IPSA 5274.72 0.38 Argentina MerVal 33080.87 1.27 Colombia IGBC 13252.76 1.08 Currencies daily % change Latest Brazil real 3.8495 -0.03 Mexico peso 18.9605 0.00 Chile peso 663.65 0.13 Colombia peso 3113.25 0.00 Peru sol 3.288 0.18 Argentina peso (interbank) 43.6000 0.85 (Reporting by Aaron Saldanha in Bengaluru Editing by Phil Berlowitz)

European shares dip, banks and Boeing suppliers in focus

08 Apr 2019

Most European stocks slid on Monday amid losses across most sectors, with German bank and real estate shares drawing investor attention as did European suppliers of U.S. planemaker Boeing following a production cut announced late on Friday.

World News

In divided America, Mueller report hardens the most strident

After months as volunteer activists demanding that President Donald Trump be impeached, Eileen and Michael O'Brien sat on their couch on Thursday, cracked open a laptop and began to read the 448-page special counsel report that liberals have dreamed would make impeachment a reality.