Brazil’s currency, stocks and bonds bolstered as a decline in President Dilma Rousseff’s approval rating fired up speculation she may have a hard time to win re-election after back-to-back years of sputtering development.
The real surge 1.9 percent to 2.2589 per dollar at the close in Sao Paulo, the largest hike among 24 developing-nation currencies recorded by Bloomberg. The Ibovespa benchmark equity index rallied 3.5 percent to 49,646.79, the biggest upgrade in six months. The advance in local bonds kicked yields on securities maturing in 2017 down 15 basis points, or 0.15 percentage point, to 12.25 percent.
The drop in Rousseff’s popularity comes three days after Standard & Poor’s bring down the nation’s credit rating to the weakest mark of investment grade, saying sluggish economic development and an expansionary fiscal policy are bolstering the country’s debt. The central bank said in a quarterly report that inflation will accelerate for a second consecutive year even if it bolsters borrowing costs by another quarter-percentage point.
“Rousseff’s not recognizing the failure of her economic policy damps any optimism that she would reverse policy after the elections,” Siobhan Morden, the head of Latin America fixed income at Jefferies Group LLC, said in a phone interview from New York. “So the idea is that anyone replacing her would be better.”
The president’s approval rating plunged down to 51 percent from 56 percent, a poll conducted by CNI-Ibope shows. It was the first pullback since July, when street protests kicked her popularity to a record low. Forty-two percent of those surveyed said Rousseff’s government was lower than that of her predecessor, Luiz Inacio Lula da Silva.
The presidential palace’s press office declined to comment on the market’s performance.
Inflation Outlook
The central bank declared in its report that consumer financial values will hike 6.2 percent this year even if policy makers raise the aim lending rate rate by 25 basis points to 11 percent. That compares with a 5.6 percent boost that was estimated in December’s report. Brazil’s economy will progress 2 percent in 2014, following 2.3 percent growth in 2013, the bank estimates.
Brazil merchandised bonds in Europe for the first time since 2005, turning to international markets for financing the same week S&P trim the country’s credit rating to BBB-.
The 1 billion euro ($1.4 billion) offering of seven-year securities had a yield of 2.96 percent. The yield on 800 million euros of bonds sold in 2005 bolstered 12 basis points to 1.08 percent.
State-run firms including Centrais Eletricas Brasileiras SA and Petroleo Brasileiro SA jumped, with voting shares of Eletrobras soaring 9.8 percent to 6.36 reais and Petrobras jumping 8.1 percent to 15.57 reais. Banco do Brasil SA leaping 6.6 percent to 22.51 reais in its largest gain since July 2012.
Jobless Report
Swap rates decline today after a government report showed jobless bolstered in February to a four-month high of 5.1 percent, firing up speculation that the central bank will restrict further hikes in borrowing costs.
Brazil has raised the aim lending rate by 75 basis points this year to 10.75 percent, the biggest surge among major economies after Turkey. Policy makers have lifted borrowing costs by 3.5 percentage points since April 2013.
Swap rates on contracts maturing in January 2017 slide down 17 basis points to 12.27 percent, the weakest since February 28.
The material has been provided by InstaForex Company – www.instaforex.com
Brazil’s currency, stocks and bonds bolstered as a decline in President Dilma Rousseff’s approval rating fired up speculation she may have a hard time to win re-election after back-to-back years of sputtering development.
The real surge 1.9 percent to 2.2589 per dollar at the close in Sao Paulo, the largest hike among 24 developing-nation currencies recorded by Bloomberg. The Ibovespa benchmark equity index rallied 3.5 percent to 49,646.79, the biggest upgrade in six months. The advance in local bonds kicked yields on securities maturing in 2017 down 15 basis points, or 0.15 percentage point, to 12.25 percent.
The drop in Rousseff’s popularity comes three days after Standard & Poor’s bring down the nation’s credit rating to the weakest mark of investment grade, saying sluggish economic development and an expansionary fiscal policy are bolstering the country’s debt. The central bank said in a quarterly report that inflation will accelerate for a second consecutive year even if it bolsters borrowing costs by another quarter-percentage point.
“Rousseff’s not recognizing the failure of her economic policy damps any optimism that she would reverse policy after the elections,” Siobhan Morden, the head of Latin America fixed income at Jefferies Group LLC, said in a phone interview from New York. “So the idea is that anyone replacing her would be better.”
The president’s approval rating plunged down to 51 percent from 56 percent, a poll conducted by CNI-Ibope shows. It was the first pullback since July, when street protests kicked her popularity to a record low. Forty-two percent of those surveyed said Rousseff’s government was lower than that of her predecessor, Luiz Inacio Lula da Silva.
The presidential palace’s press office declined to comment on the market’s performance.
Inflation Outlook
The central bank declared in its report that consumer financial values will hike 6.2 percent this year even if policy makers raise the aim lending rate rate by 25 basis points to 11 percent. That compares with a 5.6 percent boost that was estimated in December’s report. Brazil’s economy will progress 2 percent in 2014, following 2.3 percent growth in 2013, the bank estimates.
Brazil merchandised bonds in Europe for the first time since 2005, turning to international markets for financing the same week S&P trim the country’s credit rating to BBB-.
The 1 billion euro ($1.4 billion) offering of seven-year securities had a yield of 2.96 percent. The yield on 800 million euros of bonds sold in 2005 bolstered 12 basis points to 1.08 percent.
State-run firms including Centrais Eletricas Brasileiras SA and Petroleo Brasileiro SA jumped, with voting shares of Eletrobras soaring 9.8 percent to 6.36 reais and Petrobras jumping 8.1 percent to 15.57 reais. Banco do Brasil SA leaping 6.6 percent to 22.51 reais in its largest gain since July 2012.
Jobless Report
Swap rates decline today after a government report showed jobless bolstered in February to a four-month high of 5.1 percent, firing up speculation that the central bank will restrict further hikes in borrowing costs.
Brazil has raised the aim lending rate by 75 basis points this year to 10.75 percent, the biggest surge among major economies after Turkey. Policy makers have lifted borrowing costs by 3.5 percentage points since April 2013.
Swap rates on contracts maturing in January 2017 slide down 17 basis points to 12.27 percent, the weakest since February 28.
The material has been provided by InstaForex Company – www.instaforex.com
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