EMERGING MARKETS-Brazil yields fall as cenbank opens door for rate cut

jueves 1 de septiembre de 2016 12:20 GYT

By Bruno Federowski
    SAO PAULO, Sept 1 (Reuters) - Yields paid on Brazilian
interest rate future contracts fell on Thursday as traders
increased bets on an October rate cut after the central bank
dropped a mention to a lack of space for reducing borrowing
costs from its policy statement.
    In a widely expected unanimous vote, the bank on Wednesday
kept its benchmark Selic rate at 14.25 percent, the highest
since July 2006. 
    But it also laid out the blueprint to lower rates,
highlighting a reduction in uncertainty over the approval of
austerity measures and easing food inflation. 
    "All in all, while reckoning that it still continues to be a
bold call, we think there is a possibility for a monetary easing
cycle to start at the next Copom meeting," economists with
Haitong investment bank wrote in a client note.
    Market bets were about evenly split between a 25 basis-point
cut in October and stability, according to Reuters calculations.
    Expectations that rates could fall sooner rather than later
helped weaken Brazil's real currency, which fell 0.7
percent on Thursday.
    The move also reflected lower demand for high-yielding
currencies in general as traders increased bets on an imminent
U.S. rate hike ahead of the widely followed nonfarm payrolls
report on Friday.
    A drop in crude prices also weighed on currencies from oil
exporters, such as the Mexican  and Colombian
    Brazilian shares seesawed after the country's Senate
convicted former President Dilma Rousseff in an impeachment
trial, ousting her, the day before. 
    Shares in Cia Energética de Minas Gerais SA were
the biggest winners in the benchmark index after the power
holding company almost doubled the amount of shares it intends
to sell from its minority stake in Transmissora Aliança de
Energia SA. 
    Shares in Taesa, as the electricity transmission
company is known, shed as much as 8.7 percent, its biggest
intraday drop in a month. 

    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
 MSCI Emerging Markets                891.36    -0.26    12.53
 MSCI LatAm                          2400.69    -0.04    31.25
 Brazil Bovespa                     58001.55     0.17    33.80
 Mexico IPC                         47538.94    -0.01    10.61
 Chile IPSA                          4120.21     0.02    11.96
 Chile IGPA                         20450.21      0.1    12.66
 Argentina MerVal                   15585.60     -0.4    33.49
 Colombia IGBC                      10122.61    -0.53    18.43
 Venezuela IBC                      11962.25        0   -18.00
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.2418    -0.42    21.75
 Mexico peso                         18.8300    -0.25    -8.50
 Chile peso                            679.3     0.10     4.48
 Colombia peso                       2987.93    -0.56     6.07
 Peru sol                                3.4    -0.29     0.41
 Argentina peso (interbank)          14.8500     0.57   -12.58
 Argentina peso (parallel)             15.31     0.65    -6.79

 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)