EMERGING MARKETS-Brazil real, stocks rally on news Rousseff implicated in probe

jueves 3 de marzo de 2016 12:25 GYT
 

By Bruno Federowski
    SAO PAULO, March 3 (Reuters) - Brazil's real currency and
stocks rallied on Thursday on news that President Dilma Rousseff
could be implicated in a sweeping corruption scandal and bets
that the central bank could take longer to cut interest rates.
    Ruling party senator Delcidio do Amaral, who was arrested in
November for allegedly trying to obstruct the corruption probe,
has agreed to a plea bargain implicating Rousseff and her
predecessor Luiz Inacio Lula da Silva, local media reported.
    Analysts said the scandal bolsters the case for Rousseff's
impeachment, encouraging investors who blame her Worker Party's
interventionist policies for driving Brazil into what could be
its deepest recession on record. 
    The accusations also reduced the odds that Lula, a
well-known public figure with high approval ratings, could run
for president again in 2018, they added.
    "The market is betting Rousseff will not finish her
mandate," said Pedro Tuesta, an economist with 4Cast in
Washington D.C.
    Brazilian stocks rose for a fourth day, also helped
by favorable corporate news. However, shares of Embraer SA
 slumped after the planemaker published
weaker-than-expected forecasts for this year. 
    The Brazilian real outperformed most of its regional
peers, supported by the central bank's split decision to keep
benchmark rates at 14.25 percent after markets closed on
Wednesday.
    Two of the eight-members on the rate-setting committee voted
for a 50-basis-points increase, sticking to a view they have
supported since November despite economic weakness at home and
abroad. 
    The split vote led traders to trim bets on a rate cut later
this year or early next year. Inflation has been running at
double-digits, way above the central bank's target range. 
    "The split decision suggests that the central bank will
probably be more conservative in its decisions and wait for a
clear inflation slowdown before thinking about rate cuts", UBS
analysts wrote in a client note.
    Yields paid on short-term yields interest rates futures
contracts rose as traders unwound bets that benchmark rates
could soon fall. The move came even after data confirmed
expectations of a sharp economic contraction last year.
 
    
    Key Latin American stock indexes and currencies at 1540 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                  Latest              
 MSCI Emerging Markets               778.28     1.19    -3.15
 MSCI LatAm                         1924.76     1.31     3.82
 Brazil Bovespa                    45691.46     1.78     5.40
 Mexico IPC                        44700.57     0.19     4.01
 Chile IPSA                         3781.34     0.39     2.75
 Chile IGPA                        18538.17     0.46     2.13
 Argentina MerVal                  13343.62     0.92    14.29
 Colombia IGBC                      9531.05     0.76    11.51
 Venezuela IBC                     16249.52        0    11.39
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         3.8514     0.93     2.48
 Mexico peso                        17.9245    -0.53    -3.87
                                                      
 Chile peso                           685.2     0.15     3.58
 Colombia peso                      3196.94     0.25    -0.87
 Peru sol                            3.4581     0.98    -1.28
 Argentina peso (interbank)         15.5900     0.45   -16.73
                                                      
 Argentina peso (parallel)            15.86     0.25   -10.03
                                                      
 

 (Reporting by Alonso Soto)