Brazil’s Central Bank Chief Stays, Assures Lula

    Latin American shares were mostly higher on the day, led by a strong recovery from Brazil. The country posted a lower-than-expected rise in its Consumer Price Index (CPI), sparking investor talk that the country’s central bank may hold interest rates steady when they next meet.

    Elsewhere, Mexican receipts slipped mildly lower, while Argentina witnessed a more notable decline.


    Brazil’s benchmark Bovespa Index surged 467.40 points, or 1.91%, while Mexico’s benchmark Bolsa Index slipped 10.68 points, or 0.08%. Argentina’s Merval Index declined 15.66 points, or 1.08%.



    Brazilian shares strongly rebounded on the day, partly recouping losses tallied over the prior four sessions. Benign inflation data improved domestic sentiment.


    The government’s IBGE statistics institute said that the Broad Consumer Price Index advanced 0.49% in May from April, below the average analyst estimate.


    Inflation for the 12 months ended in May slipped to 8.05% from 8.07% in the 12 months to April. IBGE said the slowdown in the inflation rate was due to lower fuel prices and a slower rise in food and administered prices.


    Amid the latest developments on the political front, Brazil’s Congress last night officially opened its investigation into corruption allegations at the Post Office and other state-run firms.


    Separately, the Office of the President denied local reports that it was preparing to replace Central Bank President Henrique Meirelles.


    Meanwhile, last night, Bolivia’s Congress accepted the resignation of former president Carlos Mesa. Supreme Court Chief Justice Eduardo Rodriguez was appointed to take over as president until new elections are held within the next several months.


    Subsequently, Brazilian Energy Minister Dilma Roussef said the news lowered the risks to Brazilian assets and natural gas supplies in Bolivia.


    Separately, Brazil’s state-run oil firm Petrobras said that it, along with the energy ministry, are taking emergency steps to prevent natural gas shortages in the country due to potential supply cuts from Bolivia.


    Petrobras began substituting gas in its refineries and could start switching to other fuels at its thermo-electric power plants.


    Mexican shares returned some of the gains earned during yesterday’s session. Domestic share moves were in step with mixed U.S. market movement.


    In economic reports, the Bank of Mexico left monetary policy unchanged at its twice-monthly meeting. The central bank kept its money market liquidity restriction, or corto, at 79 million pesos daily.


    Turning to corporate news, Walmex, the Mexican unit of Wal-Mart Stores, reported a 3.4% rise in May same-store sales from the corresponding period a year earlier. Total sales jumped 11.3% last month.


    Argentine stocks moved lower, as investors continue to consider the government’s decision to freeze 20% of incoming foreign capital inflows, which took effect today.


    In corporate reports, Telecom Argentina was granted final court approval for its US$ 2.63 billion debt restructuring. The move will allow the firm to deliver US$ 1.9 billion in new bonds to creditors.


    Last night, Standard & Poor’s rated the new bonds “B-” and said it will upgrade its long-term corporate credit rating to “B-” from “D.”


    Elsewhere, First Calgary Petroleums said it was in on-going talks with Spanish-Argentine oil & gas group Repsol YPF regarding a potential joint venture development of Block 405 billion in Algeria; however, it said no assurances could be provided that an agreement would be reached.


    Thomson Financial Corporate Group – www.thomsonfinancial.com


    PRNewswire

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Brazil Adopts 99 Measures to Stem US$ 30 Billion in Losses to Piracy

    Brazil’s National Council to Combat Piracy and Intellectual Property Violations (CNCP) unanimously approved, March ...

    After London Killing Brazilians Ask: “Who Are the Terrorists?”

    The July 22 police execution of Brazilian-born electrician Jean Charles de Menezes on a ...

    Brazil and South America Lead Planet’s Deforestation

    Each year about 13 million hectares of the world’s forests are lost due to ...

    Brazil’s Fashion Fair Makes US$ 132 Million at Home and US$ 11 Million Overseas

    Fashion Business, trade fair happening parallel to Fashion Rio, an important fashion show in ...

    Cargo ship

    Brazilian Trade Relations with Arabs Keep on Growing

    Trade relations between Brazilians and Arabs are entering a new and important phase: investment. ...

    Minas Maintains Second Place Among Brazil’s Biggest Exporters

    The southeastern Brazilian state of Minas Gerais exported in excess of US$ 1 billion ...

    Paraguay Gets a Hand from Brazil’s Electoral Expertise

    Paraguay’s electoral process will enjoy a major boost, thanks to an agreement the Organization ...

    Malaria and Malnutrition Plague Brazilian Indians

    Infant mortality among Brazilian Indians has fallen 17% since the beginning of the year, ...

    Brazil’s Ricupero Retires from Unctad

    The secretary general at the United Nations Conference on Trade and Development (Unctad), the ...

    The Little One

    The main beneficiaries of the new minimum wage increase will be the 12 million ...