Maio 22, 2024

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Mercados Emergentes – O Brasil Real Tracks Gain in Lot Coins

    * BRL up on economic prospects
    * Bolsonaro faces protests as COVID deaths rise more than
    * Latam FX rally as dollar dips after Fed rally
    * BlackRock pro-risk; Morgan Stanley turns bearish on EMFX

    By Susan Mathew
    June 21 (Reuters) - Brazil's real jumped 1% on Monday on a
robust economic outlook, while Mexico's peso broke a six-session
losing streak as the dollar lost momentum after a strong rally
last week. 
    The real attempted to push up to one-year highs hit
last week. A survey of economists forecast Brazilian growth,
inflation and interest rates in 2021 to new highs following the
central bank's indication that it could quicken the pace of
    Growth is now expected be to 5%, inflation 5.9%, and the
benchmark Selic interest rate at 6.5%.
    Investors seemed to look past anti-government protests over
the weekend as COVID-19 deaths in Brazil topped 500,000.
Thousands took to the streets blasting President Jair Bolsonaro
for not acquiring vaccines fast enough and for questioning the
need for mask wearing.
    This comes as Bolsonaro's popularity has hit new lows ahead
of elections next year. A poll last month showed a left-wing
rival, former President Luiz Inacio Lula da Silva, would win in
a runoff vote if the 2022 elections were held today.

    "We believe a higher discontentment, especially if reflected
in the polls, tends to push the government to an easier fiscal
posture," Citi strategists said in a note. 
    Emerging market currencies had taken a hit last week as the
dollar rallied after the U.S. Federal Reserve struck a
surprisingly hawkish tone.    
    Morgan Stanley in a Monday note said it had turned bearish
on emerging market currencies, citing higher real rate in the
United States, expensive valuations and risks for growth
differentials to widen between developed and developing markets.
    Most emerging market currencies in Asia, Europe, the Middle
East and Africa had fallen on Monday, but Latin America got a
lift as the dollar consolidated gains.
    Mexico's peso looked to end its longest losing streak
since February, up 0.5%, while Colombia's peso rebounded
from six-week lows despite falling oil prices. 
    Meanwhile, BlackRock maintained a pro-risk stance, citing a
"powerful restart" after the pandemic, while adding that they do
not see the Fed's new outlook translating into significantly
higher interest rates any time soon. 
     "Any temporary spikes in rates could challenge emerging
market assets in particular, but we advocate staying invested
and looking through any turbulence," BlackRock said in a note.
    Among stocks, Brazil's Bovespa index was weighed down by
materials stocks as iron ore, copper and
oil prices fell.
    Shares of Mexican construction companies Grupo Carso
, owned by billionaire Carlos Slim, fell 1% after
Mexico City Mayor Claudia Sheinbaum told the firms that built
the metro railway that collapsed and killed 26 people last month
to help pay for its reconstruction. She did not specify an
    Key Latin American stock indexes and currencies at 1408 GMT:
 Stock                              Latest     Daily % change
 MSCI Emerging Markets              1348.86    -0.91
 MSCI LatAm                         2607.67    0.07
 Brazil Bovespa                     128128.01  -0.22
 Mexico IPC                         50301.78   -0.04
 Chile IPSA                         4294.39    -0.83
 Argentina MerVal                   65136.00   -1.963
 Colombia COLCAP                    1251.20    -0.48
 Currencies                         Latest     Daily % change
 Brazil real                        5.0340     0.73
 Mexico peso                        20.5771    0.39
 Chile peso                         749.1      0.00
 Colombia peso                      3751       0.40
 Peru sol                           3.95       -0.01
 Argentina peso (interbank)         95.3700    0.00
 (Reporting by Susan Mathew in Bengaluru; editing by Jonathan