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Shreyashi Sanyal

EMERGING MARKETS-Latam currencies trade lower as coronavirus concerns rise

2:02am IST

* Markets turn as worries rise about spread of virus * Data shows Mexico extends recession, peso weakens * Chilean peso hit by falling copper prices (Recasts with new prices, adds comments) By Shreyashi Sanyal Feb 25 Latin American currencies gave up early gains on Tuesday as investors shunned riskier assets on concerns about economic fallout from the fast-spreading coronavirus. Concerns escalated after the U.S. Centers for Disease Control and Prevention (CDC) alerted Americans to prepare for the spread of the deadly virus. Latin American currencies firmed initially on the back of a weaker U.S. dollar, as virus worries fueled speculation about an interest rate cut by the U.S. Federal Reserve. MSCI's index of Latam currencies fell 0.1%and its index of regional stocks slid 0.6%. "Investors in Latam might start pricing in global weakness until the third quarter and that could spell significant downside in all the emerging markets," said Edward Moya, senior market analyst for brokerage OANDA. Brazil and Argentina markets remained closed for holidays. Analysts expected them to see steep declines when they reopen on Wednesday as they catch up with the virus-fueled rout. Markets worldwide tumbled on Monday as a surge in the number of new coronavirus cases outside China, especially South Korea, Italy and Iran, heightened fears of a wider and more prolonged impact on the global economy. China reported a rise in the number of new cases in the outbreak epicenter of Hubei province on Tuesday, while other areas in the country reported declines. Mexico's peso fell 0.4%. Data showed Mexico's economy shrank more than expected in the last quarter of 2019 compared to the previous quarter, prolonging a mild recession. "With virus concerns firmly in place, expectations will be high for the Banxico (Mexico's central bank) to continue cutting rates," Moya said. Chile's peso also eased against the dollar as prices of copper, the country's biggest export, fell on fears of dwindling demand. President Sebastian Pinera called on Chileans to keep the peace ahead of an anticipated fresh outbreak of protests in March. Violent protests erupted in October over social inequality, hammering the local currency and sending it to all time lows. Stocks in Santiago, lost 1.6%, in line with a continued sell-off in global stocks. Colombia's peso was hit by falling oil prices. Key Latin American stock indexes and currencies at 2004 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1056.43 0.11 MSCI LatAm 2658.65 -0.56 Mexico IPC 43045.17 -1.76 Chile IPSA 4361.41 -1.56 Colombia COLCAP 1619.05 -0.22 Currencies Latest Daily % change Mexico peso 19.1230 -0.33 Chile peso 811.2 -0.38 Colombia peso 3434.5 -0.18 Peru sol 3.41 -0.18 (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru; editing by Nick Macfie and Tom Brown)

EMERGING MARKETS-Latam stocks, FX caught in coronavirus-fueled rout

25 Feb 2020

* Mexican peso touches lowest level in 11 weeks * Slide in oil prices hits Colombian peso * Brazil, Argentina shut for carnival festival (Updates prices, adds comments) By Susan Mathew and Shreyashi Sanyal Feb 24 Latin American currencies and stocks were caught in a global sell-off on Monday as investors steered clear of risky bets after a jump in the number of coronavirus cases outside China exacerbated global growth worries. Fears of a pandemic rose after Italy, South Korea and Iran reported a sharp rise in the number of new infections and deaths, while other Middle Eastern countries also reported new cases. "The spread of the virus outside of China... combined with continued heavy restrictions within China, challenges the assumption that the outbreak will blow over with only limited damage to the global economy," said Jonas Goltermann, senior economist at Capital Economics. With markets in Brazil and Argentina closed for local holidays until Tuesday, MSCI's index of Latam currencies fell 0.3%, while its stocks counterpart slipped 1.2%, on course for its third straight session of losses. Mexico's peso slipped 0.8%, touching an 11-week low early in the session, set for its a third straight session of declines. Mexican stocks fell 2.5% to their lowest in almost two months. Mexican consumer price inflation came in slightly below forecasts in the first half of February but remained above the central bank's target rate, data showed on Monday. Markets had reflected intermittent sparks of optimism over the last two weeks on hopes that the coronavirus outbreak might pass over by April, with falling numbers of new cases in China lending weight to that assessment. But fears have increased that the virus will continue to spread, leading to more travel curbs and suspended activity at factories and retail outlets, causing a broader hit to global supply and demand. "The market is still looking at the base-case of a V-Shape - a steep slump and a sharp recovery. But the fact is that people still don't have a handle on how bad this can get," said Win Thin, head of emerging market currency strategy at Brown Brothers Harriman. A nearly 4% slide in oil prices knocked Colombia's peso lower, putting it on track for its steepest one-day drop since November. The International Monetary Fund on Friday trimmed Colombia's growth estimate for the year, saying the country needs a more durable fiscal adjustment to meet its financial targets. It added that the central bank should increase reserves to protect against external shocks. Chile's currency gave up 1% as prices of copper fell on the London Metals Exchange. Santiago-listed stocks slumped 2% to their lowest in more than three months. Key Latin American stock indexes and currencies at 1943 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1055.40 -2.66 MSCI LatAm 2674.52 -1.2 Mexico IPC 43695.6 -2.47 5 Chile IPSA 4430.63 -2.25 Colombia COLCAP 1609.56 -1.34 Currencies Latest Daily % change Mexico peso 19.0587 -0.86 Chile peso 808.1 -0.72 Colombia peso 3433.5 -1.62 Peru sol 3.404 -0.56 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Dan Grebler)

EMERGING MARKETS-Sao Paulo stocks lead declines in Latam; Mexican peso hits 2-mth low

21 Feb 2020

* Vale posts surprise loss, slams Sao Paulo stocks * Argentina issues 12.6 bln pesos of 2020, 2021 debt * Brazil, Argentina to remain shut until Wednesday By Shreyashi Sanyal Feb 21 Brazilian stocks led declines in Latin American equities on Friday, after Vale SA reported an unexpected quarterly loss, while Mexico's peso hit a two-month low against the dollar amid rising concerns of the economic impact from the coronavirus outbreak. Brazil's Bovespa index fell 1.4%, set to register losses for the second straight day weighed down by heavyweight iron ore miner Vale shares, which fell 3.4%. Vale severely missed quarterly profit and margin estimates largely due to impairments related to its base metal and coal operations and the lingering effects of a deadly dam burst in January 2019. MSCI's index for Latin American equities fell 1.4%, while its index for currencies slipped 0.4% as markets around the world remained on edge due to a spike in coronavirus cases in China. South Korea recorded a 100 more new infections, fanning worries about the global spread of the disease and sapped risk appetite. "There is data now suggesting that there has been some amount of struggling to get parts from China, so we are seeing some disruptions to supply chains," said Edward Glossop, Latin America economist at Capital Economics. Currencies in the emerging markets space have also come under pressure from a strengthening U.S. dollar, which touched a three-year high overnight against a basket of currencies. The Mexican peso was hit the hardest by a rise in the greenback, falling 1% to 19.0346 to touch its lowest level since December. Argentina's peso continued to decline on Friday. Buenos Aires issued 12.6 billion pesos ($204 million) of debt on Thursday via local currency Treasury notes and bonds maturing in 2020 and 2021 as it looks to raise funds to service a crippling debt load amid rising fears over default. Brazil and Argentina geared up for an extended weekend on account of the carnival festival, with market activity set to resume on Wednesday. Key Latin American stock indexes and currencies at 1458 GMT; Stock indexes Latest Daily % change MSCI Emerging Markets 1082.59 -1.16 MSCI LatAm 2695.46 -1.28 Brazil Bovespa 113055.80 -1.34 Mexico IPC 44840.96 0.15 Chile IPSA 4536.95 0.02 Argentina MerVal 38706.11 -0.655 Colombia COLCAP 1644.25 -1.52 Currencies Latest Daily % change Brazil real 4.3870 0.09 Mexico peso 19.0240 -1.04 Chile peso 809.5 -0.36 Colombia peso 3409 -0.22 Peru sol 3.3968 -0.17 Argentina peso (interbank) 61.8275 -0.06 (Reporting by Shreyashi Sanyal in Bengaluru Editing by Marguerita Choy)

EMERGING MARKETS-Virus-hit EM assets set to end week in the red

21 Feb 2020

Feb 21 Stocks and currencies in developing economies were set to end the week lower on Friday, as investors avoided riskier assets on fears about the global economic impact of the coronavirus outbreak after China reported a spike in new cases.

EMERGING MARKETS-Latam FX slammed by strong dollar, Brazil's real hits new low

21 Feb 2020

* Brazil posts lowest monthly February inflation since 1994 * Coronavirus buoys safe-have demand for U.S. dollar * Argentine bonds fall after IMF nod for restructuring (Updates prices, adds comment) By Sruthi Shankar and Shreyashi Sanyal Feb 20 Latin American currencies took a beating on Thursday, as investors feared a bigger hit to global growth from the coronavirus outbreak after cases outside of China rose. The Brazil's real hit a new low amid improving safe-haven appeal for the dollar as data pointed to strength in the U.S. economy, while the Mexican and the Chilean pesos fell more than 1.3%. The number of new infections rose in South Korea, while Japan reported two new deaths and new research suggested the pathogen was more contagious than previously thought, adding to the alarm. The dollar was perched at a 10-month high against the Japanese yen after rising nearly 2% since Tuesday, while also upping pressure on Latin American currencies. Brazil's real weakened 0.6% to 4.3905 against the greenback, touching a fresh record low. Data showed Brazilian inflation slowed in February to its lowest in over a quarter of a century. The central bank of Latin America's biggest economy said it would lower banks' reserve requirements on time deposits to 25% from 31%, starting on March 16, in a move that will free up an estimated 49 billion reais ($11.2 billion) of liquidity. "Overall, it seems like there is a sense of necessity for central banks to look towards easing. Since the numbers have not been upbeat in Brazil, it only looks poorly for the currency," said Juan Perez, senior foreign exchange trader and strategist, Tempus Inc. "The real, however, has potential to recover dramatically once this coronavirus situation is overcome." A basket of currencies in the region weakened by 0.6%, while MSCI's index for Latin American equities fell 1.6%. Brazilian shares also dropped 1.6%, with conglomerate Ultrapar Participações SA leading declines after a one-time charge in its drugstore chain Extrafarma hit quarterly earnings. Meanwhile, airline Gol, Boeing Co's largest Latin America customer, fell 5% after reporting a quarterly profit that almost halved as its MAX fleet remained grounded after two deadly crashes. State-run oil firm Petroleo Brasileiro SA slid 1.8% after executives said its oil exports should fall slightly in the first quarter and production is already taking a hit, due to scheduled maintenance stoppages. Argentine bond prices fell 1.3% after the International Monetary Fund essentially gave the government a green light to restructure its bonds. The question is how much of a haircut private creditors will be asked to take in the upcoming bond revamp. Economy Minister Martin Guzman has said he wants to avoid a rancorous restructuring but vows to neither make unsustainable debt payments nor impose fiscal austerity. Key Latin American stock indexes and currencies at 2011 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1093.47 -0.93 MSCI LatAm 2733.19 -1.56 Brazil Bovespa 114665.68 -1.59 Mexico IPC 44855.76 -0.1 Chile IPSA 4536.05 0.37 Argentina MerVal 39018.02 1.634 Colombia COLCAP 1674.38 -0.11 Currencies Latest Daily % change Brazil real 4.3905 -0.62 Mexico peso 18.8225 -1.40 Chile peso 806.88 -1.36 Colombia peso 3401.4 -0.56 Peru sol 3.391 -0.29 Argentina peso (interbank) 61.7875 -0.09 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; editing by Nick Macfie and Bernadette Baum)

EMERGING MARKETS-Latam FX slammed by strong dollar, Brazil's real hits new low

20 Feb 2020

* Brazil posts lowest monthly February inflation since 1994 * Coronavirus buoys safe-have demand for U.S. dollar * Chilean peso hits two-month low as copper prices weaken * Argentine bonds fall after IMF nod for restructuring By Shreyashi Sanyal Feb 20 Latin American currencies took a beating on Thursday, as investors fretted over the global spread of the coronavirus after cases outside of China rose, with Brazil's real hitting a new low amid rising safe-haven buying of the U.S. dollar. The number of new infections rose in South Korea, while Japan reported two new deaths and new research suggested the pathogen was more contagious than previously thought, adding to the alarm. "There is still uncertainty about how long this (outbreak) is going to last and how big the economic effect is going to be, not just on China, but on supply chains around the world," said Scott Brown, chief economist at Raymond James. The dollar was perched at a 10-month high against the Japanese yen after rising nearly 2% since Tuesday, while also upping pressure on Latin American currencies. Brazil's real weakened 0.4% to 4.3917 against the greenback, touching a fresh record low. Data showed Brazilian inflation slowed in February to its lowest in over a quarter of a century. "The headline rate is likely to edge down further over the course of the year, allowing the central bank to keep the Selic (key interest) rate at its historic low," William Jackson, chief emerging markets economist at Capital Economics, wrote in a note. The central bank of Latin America's biggest economy said it would lower banks' reserve requirements on time deposits to 25% from 31%, starting on March 16, in a move that will free up an estimated 49 billion reais ($11.2 billion) of liquidity. A basket of currencies in the region weakened by 0.4%, while MSCI's index for Latin American equities fell 0.5%. The Chilean peso fell nearly 1% against the dollar, touching levels not seen since early December as prices of copper, the country's biggest export, slipped on rising worries of demand. Argentine bond prices fell 1.5% after the International Monetary Fund essentially gave the government a green light to restructure its bonds. "The IMF's assessment shouldn't come as a surprise," analysts at Credit Suisse wrote in a note. "Argentina also needs to extend its upcoming amortizations with the IMF as much as possible in order to alleviate the enormous pressure on international reserves from executing such payments." Other major currencies in Latin America, including Mexico and Colombia, also eased. Key Latin American stock indexes and currencies at 1446 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1097.27 -0.58 MSCI LatAm 2762.31 -0.51 Brazil Bovespa 115998.43 -0.45 Mexico IPC 0.00 0 Chile IPSA 4524.50 0.12 Argentina MerVal 38489.94 0.258 Colombia COLCAP 1680.69 0.26 Currencies Latest Daily % change Brazil real 4.3815 -0.38 Mexico peso 18.7376 -0.96 Chile peso 803.7 -0.61 Colombia peso 3400 -0.51 Peru sol 3.3888 -0.23 Argentina peso (interbank) 61.7850 -0.09 (Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru; editing by Nick Macfie)

EMERGING MARKETS-Emerging stocks wobble as coronavirus risks grow, FX hit by strong dollar

20 Feb 2020

Feb 20 Emerging markets stocks faltered on Thursday, on fears of a global spread of the coronavirus after a spike in new cases in South Korea, while currencies in the developing world reeled under pressure from safe-haven buying of the U.S. dollar.

EMERGING MARKETS-EM assets gain ground as new coronavirus cases drop

19 Feb 2020

Feb 19 Emerging market assets regained footing on Wednesday, as worries about the spread of the coronavirus eased after the rate of new infections slowed and as investors took comfort from China's efforts to contain the epidemic's economic impact.

EMERGING MARKETS-Latam assets shaky on fears of virus impact on companies

18 Feb 2020

* Apple warns of revenue shortfall due to coronavirus * Chilean peso hits 3-week low as copper prices slip * Colombian peso weak as oil prices fall over 2% By Shreyashi Sanyal Feb 18 Latin American stocks and currencies slipped on Tuesday, after Apple Inc's sales warning stoked worries of how the coronavirus outbreak in China could affect companies and global supply chains. The world's most valuable technology company said it will miss its March quarter sales guidance as the fast-spreading outbreak in China disrupted supply chains. A basket of Latin American equities fell 1%, to its lowest level in one-week with Brazilian stocks leading declines. "It has shifted people's focus back to the ultimate economic damage in the wake of this coronavirus," aid Art Hogan, chief market strategist at National Securities in New York. The warning sent jitters through global financial markets which were off to an upbeat start to the week after China's stimulus efforts on Monday. Most major currencies in the region traded in the red, with Brazil's real weakening for the second straight session and MSCI's index for Latin American currencies falling 0.5%. Chile's peso weakened to its lowest level in three weeks as prices of copper, the country's main export, fell on fears that low demand from China could cause a supply glut. Colombia's peso also eased against the dollar as prices of oil fell more than 2% on demand worries and a lack of further action by OPEC and its allies to support the market. In Argentina, bonds were expected to drift lower, with policymakers rushing to hammer out the revamp of $44 billion in loans on the penultimate day of meetings in Buenos Aires with the International Monetary Fund. As the South American country struggled to restructure a total of $100 billion in "unsustainable" debt, it has set itself a March 31 deadline to settle the rejig of IMF loans and then privately held bonds. Market players say the deadline will be tough to meet. Key Latin American stock indexes and currencies at 1450 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1095.13 -1.16 MSCI LatAm 2760.30 -1.02 Brazil Bovespa 114361.25 -0.82 Mexico IPC 44975.92 -0.09 Chile IPSA 4602.84 -0.62 Argentina MerVal 38648.90 -1.406 Colombia COLCAP 1665.93 0.03 Currencies Latest Daily % change Brazil real 4.3461 -0.40 Mexico peso 18.6101 -0.33 Chile peso 796 -0.36 Colombia peso 3409.94 -0.43 Peru sol 3.3838 -0.17 Argentina peso 61.6000 0.00 (interbank) (Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru)

EMERGING MARKETS-EM stocks reel under pressure from virus impact on businesses

18 Feb 2020

Feb 18 Emerging market equities lost ground on Tuesday, as Apple Inc's sales warning fanned fears of the impact from the coronavirus outbreak on companies and global supply chains, while South Africa's rand weakened due to a dreary growth outlook.

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