Results for Latin America
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Brazil Extends Rally

September 13, 2010
The Brazilian real is off to a firm start, promising to extend its rally for the fifth consecutive week--something that it has been unable to do in the past five months. There are four drivers and they may, taken together, rise the ire of officials who want to prevent further deterioration of the current account position. In July, Brazil's 12-…
Brazil Extends Rally Brazil Extends Rally Reviewed by Marc Chandler on September 13, 2010 Rating: 5
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Canada and Mexico Benefit from Stronger ISM

September 01, 2010
The Canadian dollar and Mexican peso have benefitted from the better than expected US ISM and the risk-on environment. The strong gains in the Canadian dollar come even though as we noted yesterday, a BOC rate hike at the Sept 8th meeting, which previously was fully discounted, seems less likely given the string of disappointing Canadian data, dou…
Canada and Mexico Benefit from Stronger ISM Canada and Mexico Benefit from Stronger ISM Reviewed by Marc Chandler on September 01, 2010 Rating: 5
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Wheat and Currencies

August 12, 2010
Wheat is trading higher today, positioning to snap a 4-day profit-taking decline. The US Dept of Agriculture provided updated its forecasts for grain production. It now forecasts a global harvest for year than began June 1 at 645.7 mln metric tons, down from 661.1 mln metric ton forecast last year and 680 mln metric tons in the year that just ende…
Wheat and Currencies Wheat and Currencies Reviewed by Marc Chandler on August 12, 2010 Rating: 5
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Latam Update: ABC--Argentina, Brazil, Chile

August 11, 2010
Fears that the global recovery is faltering is unlikely to prevent Chile's central bank from hiking rates tomorrow. It had hiked rates last month and the data since has been strong and economists have generally revised higher growth forecasts and Chile's finance minister recognized this last week. The market expects a 50 bp rate hike to 2.…
Latam Update: ABC--Argentina, Brazil, Chile Latam Update:  ABC--Argentina, Brazil, Chile Reviewed by Marc Chandler on August 11, 2010 Rating: 5
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Latam Currencies Softening in the Wake of USD Recovery

August 10, 2010
The US dollar's recovery against the major currencies is corresponding with its recovery against emerging markets and the Latam currency performance is consistent with this . Both the Brazilian real and Mexican peso are about 0.5% lower in the early going.
The dollar had been flirting with the BRL1.75 support yesterday and is now testing offer…
Latam Currencies Softening in the Wake of USD Recovery Latam Currencies Softening in the Wake of USD Recovery Reviewed by Marc Chandler on August 10, 2010 Rating: 5
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Bloom off the Brazilian Rose

August 04, 2010
Latin American currencies continue to perform well despite the recent string of disappointing US economic data. There is only one Asian currency that has out performed the Mexican peso for example over the past month (the Korean won is up 5.1% while the peso is up 4.3%). Brazil on the other hand has appreciated 1%, which is less than most of emerg…
Bloom off the Brazilian Rose Bloom off the Brazilian Rose Reviewed by Marc Chandler on August 04, 2010 Rating: 5
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Headline Retail Sales Soft, Details Better

July 14, 2010
Headline retail sales were a bit weaker than expected with a 0.5% decline after a 1.1% decline in May. However, the weakness was concentrated in autos, gasoline and building materials, which the Commerce Dept picked up from different reports for GDP calculations. When excluded the June core-core retail sales rose 0.2% after a 0.2% decline in May. …
Headline Retail Sales Soft, Details Better Headline Retail Sales Soft, Details Better Reviewed by Marc Chandler on July 14, 2010 Rating: 5
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Jobs Data To Keep Pressure on the Dollar

July 02, 2010
The unemployment rate fell to 9.5% from 9.7%, but this likely reflects people dropping out of the labor market. The work feel well 0.1%, which is the equivalent of about 300k job loss. The private sector 83k jobs and the May data were revised to show only 33k from 41k. Hourly earnings fell 0.1%. Bottom line then is few manhours of work, fewer jobs…
Jobs Data To Keep Pressure on the Dollar Jobs Data To Keep Pressure on the Dollar Reviewed by Marc Chandler on July 02, 2010 Rating: 5
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US Jobs, European Devleopments, Australia's Tax Compromise

July 02, 2010
The release of the US employment data is the main event of the day. Investors are well aware of the unwinding of the census build, which will produce a headline decline of jobs.
The market will look past this and focus on private sector jobs. The softer than expected ADP and ISM data yesterday have probably led to downward adjustment to expectatio…
US Jobs, European Devleopments, Australia's Tax Compromise US Jobs, European Devleopments, Australia's Tax Compromise Reviewed by Marc Chandler on July 02, 2010 Rating: 5
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Attracitveness of Colombian Bonds

June 24, 2010
Often when global investors think about high yielding Latam debt, Brazil is the first country to come to mind. And for good reason. Brazil's local currency debt offers among the highest yields in the world. On a 2-year local currency bond, Brazil pays a little more than 12%.
Colombia has the same credit rating as Brazil at BBB- by S&P. Its…
Attracitveness of Colombian Bonds Attracitveness of Colombian Bonds Reviewed by Marc Chandler on June 24, 2010 Rating: 5
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Latam Currencies Poised To Benefit

June 21, 2010
Ideas that China will allow greater flexibility in the yuan, which for many means appreciation, will have positive impact on Latam currencies. The Mexican peso and Brazilian real are leading the advance with about 0.66% gain today. Chile is next with about a 0.33% rise.
The risk is that market's euphoric reaction in Asia and Europe is not foll…
Latam Currencies Poised To Benefit Latam Currencies Poised To Benefit Reviewed by Marc Chandler on June 21, 2010 Rating: 5
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Mexico

April 16, 2010
Mexico's central bank is widely expected to remain on hold at the conclusion of today's policy making meeting. The key rate has been steady at 4.5% for nine months. Most recently Finance Minister Cordero has argued that inflation is "controlled" and year-end inflation is likely to be just over 5%. It was just below 5% in March.
Co…
Mexico Mexico Reviewed by Marc Chandler on April 16, 2010 Rating: 5
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Strong Brazilian Retail Sales, Strong Real

April 14, 2010
Brazil reported much better than expected Feb retail sales and this is encouraging expectations of a 75 bp rate hike later this month and allowing the real to extend its winning streak for the fifth consecutive session. The real has now recovered all the ground lost in the first several weeks of the year. Today is the first day the greenback is tr…
Strong Brazilian Retail Sales, Strong Real Strong Brazilian Retail Sales, Strong Real Reviewed by magonomics on April 14, 2010 Rating: 5
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Brazil Update: Meirelles Stays, BRL Firm

April 05, 2010
Brazil's central bank President Henrique Meirelles has decided to resist the temptation of politics and will stay at his post. Speculation that Meirelles would step down may have been a slight negative for the Brazilian real, which has lost almost 0.9% against the US dollar this year.
The outlook for monetary policy is largely the same, even …
Brazil Update: Meirelles Stays, BRL Firm Brazil Update: Meirelles Stays, BRL Firm Reviewed by Marc Chandler on April 05, 2010 Rating: 5
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Brazil and Mexico Update

March 31, 2010
Brazil will report is Feb nominal and primary budget balances today. While this report typically does not more the Brazilian market, the risk is that it does today and in disappointment. Late yesterday, it was reported that the central government balance deteriorated to BRL1.09 bln deficit compared with expectations for a BRL1.23 bln surplus. In i…
Brazil and Mexico Update Brazil and Mexico Update Reviewed by Marc Chandler on March 31, 2010 Rating: 5
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EM Highlights

March 24, 2010
My earlier post focused on European developments, which are driving the markets today. At the same time, there are several noteworthy emerging market developments.
1. Taiwan central bank meets tomorrow. The key 10-day loan rate is likely to remain at 1.25%, but there is a risk that it hikes reserve requirements in the coming weeks. The country rep…
EM Highlights EM Highlights Reviewed by Marc Chandler on March 24, 2010 Rating: 5
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Mexico: Central Bank Meeting Overshadowed

March 19, 2010
Mexico's central bank meets today. No change in the 4.5% policy rate is likely. The economy is just emerging from the worst recession in modern times, with a 6.5% contraction last year. Price pressures are rising, but the increase from 4.46% in January to 4.83% in February appears to largely reflect increases in administered prices, like gasol…
Mexico: Central Bank Meeting Overshadowed Mexico: Central Bank Meeting Overshadowed Reviewed by Marc Chandler on March 19, 2010 Rating: 5
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Brazil Left Rates Steady, But April Hike More Likely

March 17, 2010
In what we thought was a close call, the central bank of Brazil left its overnight rate steady at 8.75%, a record low. The decision was made by a 5-3 majority. The dissenters wanted a 50 bp rate hike.
The closeness of the vote is a strong signal that barring a significant downside surprise over the next several weeks, Brazil's central bank will…
Brazil Left Rates Steady, But April Hike More Likely Brazil Left Rates Steady, But April Hike More Likely Reviewed by Marc Chandler on March 17, 2010 Rating: 5
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Close Call on Brazil Today

March 17, 2010
Brazil's central bank meets today and surveys suggest the market is nearly evenly divided over the outlook. Strong growth and rising inflation and inflation expectations requires a rate hike and the issue is whether the central bank goes today or waits a month to lift the overnight Selic rate which currently stands at 8.75%.
Close Call on Brazil Today Close Call on Brazil Today Reviewed by Marc Chandler on March 17, 2010 Rating: 5
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Peru Tax Part of Trend ?

January 26, 2010
Last year Brazil imposed a 2% tax on BRL purchases related to fixed income and equity purchases. Taiwan took steps to discourage foreign investors from parking funds in short-term instruments, which it saw as speculation in currency appreciation. Starting this week Peru's 30% tax on foreign investors profits from short-term (up to 60 days) cur…
Peru Tax Part of Trend ? Peru Tax Part of Trend ? Reviewed by magonomics on January 26, 2010 Rating: 5
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