brl

Renewed anxiety

In Europe, a multitude of thorny issues continue to raise their ugly heads. According to Der Speigel, the Greek fiscal shortfall is around EUR 20bn, much higher than original estimates. If this is the case, then last week’s decision by the troika to leave Athens may well reflect more fundamental differences than both sides have admitted to. Separately, Angela Merkel and Francois Hollande apparently failed to narrow their differences over how and when to introduce joint eurozone banking oversight.
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24/09/2012 @ 07:15 GMT

More war

Not for the first time, Brazil is shouting about the impact of further QE on the dollar and suggesting that its main impact is likely to be to lower the dollar in an attempt to boost US exports. So far, there is little sign of this happening, with the dollar (index) largely unchanged since the Fed announcement. It’s probably too early to draw strong conclusions on this front, with the dollar having bounced back from some oversold conditions seen towards the end of last week.
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21/09/2012 @ 09:42 GMT

Euro crunch time once again

Not for the first time, the single currency is waiting for a European summit to offer renewed hope and some light at the end of the tunnel. As the past few weeks have shown, the ability of supposedly supportive events to prop up the single currency is getting ever weaker. At present, the expectations for the summit at the end of this week are fairly limited, some formalisation of the growth compact pushed by France (and others), together with some noises around a banking union.
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25/06/2012 @ 07:20 GMT

Hold onto your hats

It’s gearing up to be a busy Friday. We’ve already had manufacturing PMI data in China coming in softer than expected, falling to 50.4 (from 53.3). In Europe, markets are understandably nervous, the euro once again having traded at a new low for the year as Asia (at 1.2324), whilst Spain has denied speculation that it is talking to the IMF about possible aid. Meanwhile, there were some fairly critical words for European leaders from the head of the ECB yesterday, saying that it was not the ECB’s job to “fill the vacuum left by the lack of action by national governments”.
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01/06/2012 @ 06:56 GMT

Real problems in Brazil

The 50 basis point cut in the benchmark rate in Brazil overnight came as little surprise and takes the rate to 8.50%, lower than that which prevailed during the early months of the global crisis back in 2009-10. The authorities are clearly worried about the recent slowdown in the economy and have eased their concerns on the inflation front. The economy all but ground to a halt in the final quarter of last year (rising 0.3% QoQ), which puts tomorrow’s Q1 data into focus, where the street expects a 0.5% increase.
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31/05/2012 @ 11:09 GMT

More trouble and strife

Yesterday’s bond auctions might have gone well enough, but unfortunately other issues are brewing in Europe and moreover they are getting progressively worse. In Italy, as the economy reverses more rapidly than expected, the fiscal dynamics look increasingly problematic. Unsurprisingly, the IT/GER 10yr spread widened another 15bp to almost 400bp. Spain is in the doghouse as well, for similar reasons, with the 10yr yield not far short of 6.0% again.
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20/04/2012 @ 07:00 GMT

Brazilian real carried out

The surprise overnight was not that Brazil cut its key rate by a further 75bp to 9.00%, but that the central bank was seemingly so dovish regarding the outlook going forward. It noted that risks to the inflation trajectory remained limited and that, on the basis of the fragile global economy, “the contribution of the external sector has been disinflationary”. This perceived dovishness was the main factor pushing the real weaker, USD/BRL pushing the highs of the year at 1.8839. This represents a near 10% depreciation for the real since the end of February.
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19/04/2012 @ 09:05 GMT