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Russia’s rouble slumped 1% on Thursday,
pressured by geopolitical tensions, while most Latin American
currencies shrugged off early losses thanks to a weaker dollar.
The rouble slid past 75 per dollar after the Kremlin
said talks with the United States and NATO this week had been
“unsuccessful” in bridging fundamental differences over the
Ukraine crisis and Moscow’s demands that NATO pull back from
central and eastern Europe.
The United States said it had largely settled on the options
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for sanctions against Russia should it invade Ukraine and would
be prepared to impose them as soon as any tanks roll.
Brazil’s real hit near two-month highs, with
data showing Brazil’s services activity returned to positive
territory in November with a much stronger than expected gain,
putting the sector above pre-pandemic levels despite high
inflation.
But with weaker than expected industrial production and
civil construction inputs, Citigroup strategists now expect
fourth-quarter GDP to contract. Combined with expected tighter
monetary policy and rising Omicron cases in Brazil, Citi expects
a contraction in 2022 annual GDP.
With the dollar taking a hit as speculation about tighter
U.S. monetary policy eased, most other Latam currencies traded
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steady to higher with Colombia’s peso hitting one-month
highs.
Among stocks, Brazilian meatpackers BRF, Marfrig
and JBS jumped between 2.2% and 3.8%. BRF
signed a memorandum of understanding with Saudi Arabia’s
sovereign fund to create a joint venture to make poultry
products in the Middle Eastern country.
Brazilian wood panels manufacturer Dexco rose
more than 2% after announcing a new $49 million share buyback
program.
Miner Vale slid 1% as iron ore prices dipped on
demand uncertainty. JPMorgan sees cost inflation ruling miners’
earnings in the second half of 2022, and expects Rio Tinto
, BHP and Vale to retain conservative guidance,
and supply to remain tight in 2022.
After Citigroup announced the sale of its consumer
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banking operations in Mexico, the country’s government on
Wednesday said it expected plenty of bidders to emerge for the
assets.
In China’s struggling property sector, China Evergrande
Group’s main unit Hengda Real Estate Group has reached
an agreement with bondholders to delay payments for a 4.5
billion yuan ($707.5 million) onshore bond, Hengda said in a
filing on Thursday.
In Argentina, inflation likely rose back up to 3.6% in
December, a Reuters poll showed, which would be the highest
level since last April. The country’s central bank recently
hiked the benchmark interest rate to 40%, its first increase in
over a year.
Key Latin American stock indexes and currencies at 1449 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1266.17 -0.09
MSCI LatAm 2205.83 0.8
Brazil Bovespa 105699.50 0.01
Mexico IPC — —
Chile IPSA 4551.53 0.97
Argentina MerVal 85373.23 0.321
Colombia COLCAP 1446.89 -0.27
Currencies Latest Daily %
change
Brazil real 5.5121 0.42
Mexico peso 20.3591 -0.12
Chile peso 821.9 0.12
Colombia peso 3943.46 0.69
Peru sol 3.8969 -0.33
Argentina peso 103.7100 -0.04
(interbank)
(Reporting by Susan Mathew in Bengaluru
Editing by Mark Potter)
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