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India

Susan Mathew

European shares rise after Fed fuels rate cut hopes; ECB minutes awaited

11 Jul 2019

European shares were set to snap four days of losses on Thursday, after U.S. Federal Reserve Chair Jerome Powell's dovish comments cemented hopes of an interest rate cut this month, even as trade frictions between France and the United States rose.

UPDATE 1-European shares fall as BASF profit warning hits German stocks

09 Jul 2019

* Apple suppliers down, track slump in iPhone maker overnight

EMERGING MARKETS-Latam FX fall as dollar rallies on dimmer hopes of aggressive U.S. rate cut

06 Jul 2019

(Updates prices) By Susan Mathew July 5 Most Latin American currencies slipped on Friday as the dollar was lifted by hopes that the U.S. Federal Reserve would not cut rates aggressively at its meeting this month. The dollar rally was spurred by investors trimming bets of a 50-basis-point cut in U.S interest rates in July after data showed that U.S. jobs growth in June beat expectations strongly to the upside. Regional currencies lost between 0.03% to 0.7%, with Brazil's real slipping from three-month highs hit last session, as the dollar climbed 0.5%. But, tepid wage growth in the United States over the same period kept alive bets of a quarter-basis-point cut. "It (jobs data) reduces the scope for a 50bp cut this month, though does little to alter the easing narrative linked to the Fed," strategists at TD Securities wrote in a note. Riskier assets such as those in emerging markets have been rising since last month on hopes of accommodative monetary policy by major central banks, and signs of progress in U.S.-China trade relations. Brazil's real fell 0.4% after a strong rally on Thursday spurred by the government's pension reform bill clearing a key congressional hurdle, which paved the way for it to be put to a lower house plenary vote before the parliament breaks for recess. On the week, the currency was on course for a 0.8% gain, reversing last week's decline. Mexico's peso was flat, and was set to clock weekly gains of around 1.2%. A 0.7% drop in Chile's peso led losses in the region on Friday, followed by the Colombian currency's 0.6% dip. Stocks in the region were mixed. Brazil shares rose 0.3% to hit fresh highs. Airline Gol Linhas Aereas Inteligentes topped the Bovespa index after reporting a 6.5% rise in demand for flights in June. Mexican shares dipped 0.1%, in line with U.S. stocks that declined after the jobs data. In Argentina, both stocks and the currency climbed. According to a preliminary draft of the government's upcoming budget proposal, inflation should end 2019 under 40.3% while the economy shrinks 0.8%. Latin America's No. 3 economy has been hammered by recession and inflation of more than 57 percent over the last 12 months. On Friday, the International Monetary Fund said it has completed its fourth review of the country and is set to disburse $5.4 billion to the government as per a standby credit deal. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1059.33 -0.5 MSCI LatAm 2911.75 -0.3 Brazil Bovespa 103968.38 0.32 Mexico IPC 43396.60 -0.14 Chile IPSA 5057.13 0.04 Argentina MerVal 41797.12 1.01 Colombia IGBC 12834.52 0.71 Currencies Latest Daily % change Brazil real 3.8165 -0.48 Mexico peso 19.0129 -0.08 Chile peso 683.36 -0.64 Colombia peso 3207.18 -0.56 Peru sol 3.29 0.03 Argentina peso 41.7950 0.49 (interbank) (Reporting by Susan Mathew in Bengaluru; editing by Jonathan Oatis)

European shares retreat from 12-month highs on Hexagon outlook, dimmer rate cut hopes

05 Jul 2019

European shares broke a six-day winning streak on Friday as poor German data and a downbeat outlook from Sweden's Hexagon weighed, and losses deepened after strong U.S. jobs data saw investors trimming bets of an aggressive rate cut by the U.S. Federal Reserve this month.

EMERGING MARKETS-Dollar strength pressures Latam FX, Brazil real falls from over 3-mth peak

05 Jul 2019

By Susan Mathew July 5 Latin American currencies weakened on Friday, with Brazil's real retreating from three-month highs, as the dollar strengthened after a strong rebound in U.S. job growth had investors trimming bets for an aggressive interest rate cut by the Federal Reserve in its July meeting. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.5% after data showed that U.S. job growth rebounded strongly in June as government hiring surged. "The results were really encouraging and reinforced the underlying strength of the U.S. market and the U.S. economy in general, and is likely to help to temper the markets' aggressive calls for easier policy from the Federal Reserve," said Candice Bangsund, asset allocation manager at Fiera Capital in Montreal. The Brazilian real fell 0.7% after touching its strongest level in more than three months on Thursday after the government's pension reform bill cleared a key congressional hurdle. A Reuters poll showed that the real is waiting for an imminent breakthrough of President Jair Bolsonaro's social security overhaul in Congress to consolidate recent gains after a volatile first half of 2019. Senators are expected to complete the legislative process by year-end. The Mexican peso slipped 0.1%, while the Chilean peso slid half a percent as the dollar's strength pressured copper prices. Emerging market assets have rallied in the first half of 2019 on growing hopes that major central banks would turn to dovish policies in the wake of slowing global growth, which would make emerging market assets more attractive. Another Reuters poll showed that developing world currencies may have seen the best of 2019 as U.S. President Donald Trump is expected to backpedal on his conciliatory tone from the recent G20 summit. MSCI's index of Latin American currencies is up 0.4% so far this week, while its stocks index is on course to wrap up with a 1.3% gain for the week. Among stocks, Brazil's Bovespa stock index fell 0.7% after scaling an all-time high last session on pension reform optimism. Losses were broad-based. A dip in iron ore prices hitt miner Vale, which weighed most on the index. Key Latin American stock indexes and currencies at 1336 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1057.64 -0.66 MSCI LatAm 2881.39 -1.34 Brazil Bovespa 102779.67 -0.83 Mexico IPC - - Chile IPSA 5048.46 -0.13 Argentina MerVal - - Colombia IGBC - - Currencies Latest Daily % change Brazil real 3.8243 -0.68 Mexico peso 19.0340 -0.19 Chile peso 682.48 -0.51 Colombia peso 3212.63 -0.73 Peru sol 3.291 0.00 Argentina peso - - (interbank) (Reporting by Susan Mathew in Bengaluru; editing by Jonathan Oatis)

EMERGING MARKETS-Pension reform prospects lift Brazil's real, stocks

05 Jul 2019

(Updates prices) By Susan Mathew July 4 Brazil's currency and stocks rose on Thursday after a congressional committee in charge of analyzing the government's pension reform bill approved its main text. The draft bill, which analysts say is critical to improving Brazil's fiscal health and economy, could now be put to a lower house plenary vote before recess on July 18. Brazil's real hit a more than three-month high, while the Bovespa stock index surged 1.7% to life highs on broad-based gains. The bill, designed to overhaul the country's bloated pension system and result in savings of around 1 trillion reais ($264 billion) over 10 years, is seen as key in getting the sluggish economy back on-track. "After approval in two voting sessions in the lower house, the pension reform would move on to the Senate, where in our view it should be approved by the end of September or beginning of October," Credit Suisse analysts wrote in a note. "We believe that risks of additional dilution of the total fiscal savings in the Senate are very low," they added. Brazil markets have been volatile as the bill makes its way through congress. Against a steady dollar, most other regional currencies were flat to higher. Chile's peso, however, slipped 0.2% as prices of its main export, copper, fell. Stocks in the region, besides those in Brazil, fell between 0.04% and 0.2% after most made strong gains in last session on a Wall Street rally spurred by hopes that the Federal Reserve will cut interest rates. U.S. stock markets were closed on Thursday for the July Fourth holiday. Investors are looking out for U.S. June non-farm payrolls data for further clues on the Fed's possible policy signal from its July meeting. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1064.46 0.46 MSCI LatAm 2919.63 1.84 Brazil Bovespa 103719.90 1.71 Mexico IPC 43467.21 -0.04 Chile IPSA 5046.12 -0.17 Argentina MerVal 41253.43 -0.12 Colombia IGBC 12706.17 -0.21 Currencies Latest Daily % change Brazil real 3.7959 0.79 Mexico peso 19.0050 0.03 Chile peso 679 -0.18 Colombia peso 3189.25 0.18 Peru sol 3.291 0.00 Argentina peso 41.5000 1.31 (interbank) (Reporting by Susan Mathew in Bengaluru;)

European shares lifted to 12-month high by Italy, looser monetary policy forecasts

04 Jul 2019

European shares closed at their highest in more than a year on Thursday as Italian stocks surged on relief that Rome had avoided European Union disciplinary action and rising expectations of looser monetary policy by major central banks.

EMERGING MARKETS-Latam currencies rise as dollar dips, investors return to riskier assets

04 Jul 2019

(Updates prices) By Susan Mathew July 3 Latin American currencies firmed on Wednesday as the dollar dipped and as investors gauged the implications of the nomination of the IMF's Christine Lagarde to head the European Central Bank. Markets are hoping that International Monetary Fund head Lagarde will maintain the ECB's recent dovish tone, which was echoed by the U.S. Federal Reserve, and had spurred inflows into riskier assets last month. "People think that Lagarde will be more dovish," said Gustavo Rangel, chief economist, LATAM at ING, adding that general expectations of a more support from the ECB and Fed are driving the market on the day. Regional currencies rose between 0.2% and 0.8% against the dollar, with Colombia's peso getting an additional boost from higher oil prices. Brazil' real rose 0.8% with the focus remaining on pension reforms. A special congressional committee is to vote on the bill later in the day before it is sent to the Lower House of parliament. Investors are hoping that the bill can be put to vote in the Lower House before the congressional recess begins on July 18. Economy Minister Paulo Guedes also said the economy is poised to start growing again, and at a "much faster" pace than the recent past. Brazil's services sector data for June showed that Brazil may have tipped back into recession. On Tuesday the central bank chief had reiterated that economic recovery will be gradual. Most regional stocks market also gained, with Brazil's Bovespa index hovering near all-time high levels, tracking the major U.S. indexes which closed at record highs in a shorter trading day ahead of the Independence Day holiday on Thursday. The rally was spurred by hopes that the Fed would take a more accommodative turn after data on Wednesday showed the U.S. trade deficit jumped to a five-month high while services sector data showed a slowdown in activity. Argentine shares fell 1% after scaling yet another record high earlier in the session. The Merval stock index has been hitting new life highs for the last three sessions. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1060.61 -0.28 MSCI LatAm 2876.80 1.61 Brazil Bovespa 102013.72 1.4 Mexico IPC 43330.28 -0.26 Chile IPSA 5045.45 0.71 Argentina MerVal 41357.32 -1.04 Colombia IGBC 12645.89 0.7 Currencies Latest Daily % change Brazil real 3.8203 0.87 Mexico peso 19.0218 0.15 Chile peso 677.5 0.34 Colombia peso 3194.98 0.33 Peru sol 3.291 0.09 Argentina peso 42.0300 0.40 (interbank) (Reporting by Susan Mathew in Bengaluru;)

Lagarde ECB pick triggers euro-zone share rally as investors chase yield

03 Jul 2019

Euro zone stocks surged on Wednesday as investors piled into firms with big dividends on hopes European Central Bank chief nominee Christine Lagarde will maintain the ECB's dovish stance, while Italian shares jumped over 2% on avoiding a EU sanction threat.

EMERGING MARKETS-Latam FX steady as investors gauge Lagarde's nomination to head ECB

03 Jul 2019

By Susan Mathew July 3 Amid growth worries, Latin American currencies were quiet against a steady dollar on Wednesday as investors gauged the implications of the nomination of the IMF's Christine Lagarde to head the European Central Bank. Markets are hoping that International Monetary Fund head Lagarde will maintain the ECB's recent dovish tone, which was echoed by the U.S. Federal Reserve, and had spurred inflows into riskier assets last month. The nomination of Lagarde is a big surprise, wrote Mark McCormick, global head of FX strategy at TD Securities. "Still, we note the impact has been muted, mostly reflecting the fact that markets have insufficient information to stereotype her expected policy lean." Signals that the United States may be backtracking on its promise to reduce restrictions on Chinese tech giant Huawei and fresh tariffs threats on the European Union on Tuesday had investors worried that the recent slew of poor manufacturing data from across the globe is here to stay. While the currencies of Mexico and Chile barely moved, higher oil prices helped crude exporter Colombia's peso add 0.1%. Brazil's real swung between gains and losses with data showing the country's services sector activity shrank in June for the third month in a row - the clearest warning sign yet that the economy may have slipped back into recession, adding pressure to pass pension reforms seen as crucial in shoring up the economy. Investors are hoping that the bill can be put to vote in the Lower House before the congressional recess begins on July 18, but the final version to be voted on by the House is yet to be passed by a special congressional committee. Sao Paulo-traded stocks rose 0.5% on broad-based gains with financial and consumer stocks leading gains. Stocks in Chile also rose, in line with world stocks. Key Latin American stock indexes and currencies at 1356 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1058.41 -0.49 MSCI LatAm 2848.22 0.6 Brazil Bovespa 101097.08 0.49 Mexico IPC 43433.16 -0.02 Chile IPSA 5026.70 0.34 Argentina MerVal - - Colombia IGBC 12551.07 -0.06 Currencies Latest Daily % change Brazil real 3.8402 0.35 Mexico peso 19.0305 0.11 Chile peso 680.32 -0.08 Colombia peso 3206.18 -0.02 Peru sol - - Argentina peso - - (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)

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