360° Coverage : Brazil Rate Hikes Not Done Yet

2 Updates

Brazil Rate Hikes Not Done Yet

Apr 3 2014, 8:27am CDT | by

Brazil raised its overnight Selic interest rate to 11% Wednesday as expected, but Nomura Securities in New York thinks the Central Bank is not done hiking rates just yet. Tony Volpon, Head of...

Filed under: news

 
 
 

28 weeks ago

Brazil Rate Hikes Not Done Yet

Apr 3 2014, 8:27am CDT | by

Brazil raised its overnight Selic interest rate to 11% Wednesday as expected, but Nomura Securities in New York thinks the Central Bank is not done hiking rates just yet.

Tony Volpon, Head of Emerging Markets Americans at Nomura, said interest rates will probably go to 11.25% in May, and then the Central Bank will finally take a breather.

The post-meeting communiqué brought language changes that strongly signal that the current tightening cycle is near its end, Volpon wrote in a note to clients Thursday morning.

Different from the February statement, now monetary authorities are saying that it will “monitor the evolution of the macroeconomic scenario until our next meeting, to then define the next steps our monetary policy strategy.” In previous instances, such language was used to announce the strong intention to end, begin, or change the pace in the current strategy. In the current context, it signals the desire to end the cycle at the next meeting, with or without a further 25 basis point hike to 11.25%.

The decision to signal an end of the cycle at the May 28 meeting is, and is not, surprising. It is surprising because it comes right after a hawkish inflation report that saw large increases in its inflation forecast with no meaningful downgrading in the economic outlook. On the other hand, the weak state of the economy argues for a pause in the interest rate tightening cycle, despite near term inflationary challenges due to drought-related food price shocks, and Brasilia’s unwillingness to raise regulated prices like electricity in an election year.


Flash Player 9 or higher is required to view the chart
Click here to download Flash Player now

–The iShares MSCI Brazil ETF finally outperformed the MSCI Emerging Markets Index in late March despite higher interest rates and creeping inflation.

The more dovish-than-expected message will drive the bulls buying shorter term interest rates futures in Brazil and bonds. But the longer end should not benefit that much, says Marcelo Salomon, an economist with Barclays in New York.

“The real question for monetary policy remains, and is only likely to be dealt with after the elections — namely, how to deal with repressed regulated prices in an environment of weak economic activit,” Salomon says.

On Thursday, the hotly traded iShares MSCI Brazil (EWZ) exchange traded fund was off by 1.5% in the pre-market hours.

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the wor ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development.
 
 
Colombia to launch world's first floating gas liquefaction plant
Bogota, Oct 21 (IANS/EFE) The world's first floating gas liquefaction plant is due to begin operating next year off the coast of northern Colombia under a pact between Canada-based Pacific Rubiales Energy and Belgian shipbuilder Exmar.
 
 
Paralysed man walks again after pioneering cell therapy
London, Oct 21 (IANS/EFE) A paralysed man has been able to walk again after therapy that involved transplanting cells from his nasal cavity into his spinal cord, the BBC reported Tuesday.
 
 
Non-smokers face major health risks in smoking homes
London, Oct 21 (IANS) Living with smokers is as bad as living in smoke-free homes in heavily polluted cities such as Beijing or London, researchers said.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla