EMERGING MARKETS-Brazil real up on hopes of political change despite cenbank action

viernes 18 de marzo de 2016 12:45 GYT
 

By Bruno Federowski
    SAO PAULO, March 18 (Reuters) - The Brazilian real
strengthened on Friday on hopes that a change in government
could lay the groundwork for an economic recovery, even after
the central bank announced it would reduce its support for the
currency.
    Brazil's lower house launched on Thursday impeachment
proceedings against leftist President Dilma Rousseff by
approving a committee of 65 members that will assess the
possibility of her ouster. 
    Opposition parties tried to speed the process by holding a
congressional session on Friday, when most lawmakers are usually
away from Brasilia. 
    The moves come amid massive protests against Rousseff. On
Friday, riot police dispersed protesters in São Paulo's main
avenue, hours before planned pro-government demonstrations.
    "As tension keeps rising, we believe that an eventual
resolution to the stalemate is moving closer ... but the process
is unlikely to be smooth or linear," analysts with Morgan
Stanley wrote in a client note.
    The Brazilian real has jumped about 10 percent
against the U.S. dollar so far this month, also lifted by the
U.S. Federal Reserve's forecast of a softer path of rate hikes.
    That led Brazil's central bank on Thursday to announce that
it would reduce the rollover of about $110 billion in currency
swaps it currently has in its books. 
    "Given the very weak macro fundamentals and lingering
political uncertainty, the economy would benefit from a currency
that is moderately cheap," Goldman Sachs economists wrote in a
note.
    "The last thing the real sector and the slowly recovering
export sector need now is to go back to a period of currency
over-valuation."
    The benchmark Bovespa stock index fell on
profit-taking after closing the previous session with its
biggest one-day gain since 2009, but eyed its fourth weekly
advance in a row.
    Financial shares, as well as stocks from state-controlled
companies, weighed on the index on Friday after benefiting
strongly from bets on political change.
    Shares of Usinas Siderurgicas de Minais Gerais SA 
were flat after Brazilian and Japanese creditors agreed to give
the steelmaker a grace period of 120 days. 
    The move avoids a short-term pitfall but does not guarantee
long-term sustainability, BTG Pactual analysts wrote in a note.
 

    Key Latin American stock indexes and currencies at 1635 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
                                   Latest              
 MSCI Emerging Markets                826.99     1.24     2.87
 MSCI LatAm                          2140.78     0.09    16.89
 Brazil Bovespa                     50321.72    -1.16    16.08
 Mexico IPC                         45972.66     1.18     6.97
 Chile IPSA                          3936.67     0.99     6.97
 Chile IGPA                         19257.64     0.87     6.09
 Argentina MerVal                   12910.35    -0.47    10.58
 Colombia IGBC                       9618.26     0.12    12.53
 Venezuela IBC                      14991.00        0     2.76
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                      Latest           
 Brazil real                          3.6190     0.87     9.06
 Mexico peso                         17.2765     0.24    -0.27
 Chile peso                            675.5    -0.87     5.06
 Colombia peso                       3079.89    -0.34     2.90
 Peru sol                             3.3781    -0.27     1.06
 Argentina peso (interbank)          14.8500     0.67   -12.58
                                                       
 Argentina peso (parallel)             15.48     0.65    -7.82
                                                       
 

 (Reporting by Bruno Federowski; Additional reporting by Paula
Arend Laier; Editing by Meredith Mazzilli)