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☆ Criticism of Lula's economic plans mounts as Brazil markets tank
▼ + stars: | 2023-01-04 | by ( Gabriel Araujo | ) www.reuters.com time to read: +3 min

Haddad, a former mayor of Sao Paulo, took office vowing to restore public accounts and with the challenge of presenting a credible fiscal framework after Congress passed a giant Lula social spending package. Markets reacted badly to Haddad's first days in office, especially after Lula ordered a budget-busting extension to a fuel tax exemption which Haddad had publicly opposed. "Haddad learned on his first day in office that he will be a decorative figure, a sort of task worker for President Lula," the conservative daily said in an editorial. On Tuesday, markets were further rattled by remarks by Lula's social security and labour ministers. That was compounded when he said Lula's government would need to review the investor-friendly pension reform approved by Bolsonaro's administration.

☆ Brazil's BRF signs $111 million leniency deal after graft accusations
▼ + stars: | 2022-12-29 | by ( ) www.reuters.com time to read: +1 min

SAO PAULO, Dec 28 (Reuters) - Brazilian food processor BRF SA (BRFS3.SA) on Wednesday signed a leniency agreement with local authorities over payments it must make to the South American country's government following accusations of graft. The deal with Brazil's attorney general (AGU) and comptroller general (CGU) offices requires BRF to pay around 584 million reais ($111 million) to the government, the CGU said, citing accusations that company employees paid public officials to gain "undue advantages" following federal police investigations. BRF said in a filing the payments will be made in five annual installments, starting next June 30. In a separate statement, BRF said it "understands that signing this leniency agreement puts an end to discussions regarding the past issue," adding that it does not condone illegal activity or improper conduct. Shares in BRF closed on Wednesday up nearly 8% at 7.76 reais, while the broader Bovespa Index rose 1.53%.

RIO DE JANEIRO, Dec 22 (Reuters) - Brazilian President-elect Luiz Inacio Lula da Silva will appoint Senator Jean Paul Prates of his Workers Party to be the next chief executive of state-run oil company Petrobras (PETR4.SA), a member of his transition team said on Thursday. Deyvid Bacelar, head of oil workers' union FUP, said on social media that Lula had picked Prates based on the labor group's recommendations. He added that Senator Alexandre Silveira would be chosen to be mines and energy minister. The transition team, Prates and Petrobras did not immediately respond to requests for comment. Preferred shares of the oil company rose more than 2% after Bacelar's post, outperforming Brazil's benchmark stock index Bovespa <.BVSP>, before ceding half the gain.

☆ Global stocks to grind higher, lacklustre year ahead - Reuters poll
▼ + stars: | 2022-11-30 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

Analysts cut their 12-month predictions compared with three months ago for most of the 17 global indexes covered in Reuters polls conducted between Nov. 14-29. The still mostly optimistic forecasts for stock markets to grind higher depend on mild recessions or none at all. Wall Street's benchmark S&P 500 index (.SPX) was predicted to end next year at 4,200, only about 6% higher than current levels. But the survey predicted relatively better performance for emerging market stock markets. Up only 4% year to date, Brazil's benchmark Bovespa stock index (.BVSP) was predicted to rally 13% by end-2023.

☆ Global stocks to grind higher, lacklustre year ahead: Reuters poll
▼ + stars: | 2022-11-30 | by ( Hari Kishan | ) www.reuters.com time to read: +5 min

Summary poll dataBUENOS AIRES/MEXICO CITY, Nov 29 (Reuters) - Brazil stocks will rally by double-digits through end-2023, despite uncertainty about new government policies as President-elect Luiz Inacio Lula da Silva seeks to balance social priorities and budget constraints, a Reuters poll predicted. The benchmark Bovespa stock index (.BVSP) is set to rally 13% by end-2023 to 123,250 points from 108,976 points on Friday, according to the median estimate of 11 strategists polled Nov. 14-23. The Ibovespa (index) is still at a discount, awaiting government news," said Fernando Bresciani, research analyst at Andbank. Members of his transition group have voiced contrasting opinions on 2023 budget talks and the leadership race for the Inter-American Development Bank (IDB). Private economists in a central bank weekly poll projected an expansion rate of just 0.7%.

☆ Brazil's Lula won't have interventionist stance on Petrobras, aide says
▼ + stars: | 2022-11-24 | by ( Ricardo Brito | Tom Polansek | ) www.reuters.com time to read: +3 min

[1/2] A logo of Brazil's state-run Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File PhotoBRASILIA, Nov 24 (Reuters) - Brazil's incoming leftist government will not have an interventionist stance on state-run oil giant Petrobras (PETR4.SA), a member of the transition team for President-elect Luiz Inacio Lula da Silva said on Thursday. Market participants have been showing concern over how the Lula administration might run Petrobras. He also noted that the incoming administration, and not Petrobras itself, would set a new fuel pricing policy for the country. Shares of Petrobras, which slipped by roughly a quarter since mid-October, were up more than 4% on Thursday, outperforming Brazil's Bovespa stock index (.BVSP), which rose 2.5%.

That would surpass the October 2020 peak of 89% in the central bank series dating back to 2006. "It reduces the degree of freedom for the central bank to manage monetary policy," said Ramos. Brazil's central bank has held interest rates at 13.75% since August, after 12 straight hikes that lifted rates from a 2% record low in March 2021. Lula campaigned openly against the constitutional spending cap that limits spending growth to inflation. The proposal also removes some public investments from the cap, opening space for another 23 billion reais in public spending next year.

SAO PAULO, Nov 17 (Reuters) - Brazilian markets slumped on Thursday after the incoming administration of President-elect Luiz Inacio Lula da Silva proposed exempting some 175 billion reais ($32 billion) from the spending cap on next year's budget to pay for welfare programs. Lula's transition team late on Wednesday proposed to lawmakers guidelines for a constitutional amendment that would set a spending cap waiver to secure welfare programs, though without establishing how long the waiver would last. "The stock market will fall, the dollar will rise (against the real). The dollar doesn't rise and the stock market doesn't fall because of serious people, but because of those speculating every single day," he said. Helder Wakabayashi, an analyst at Toro Investimentos, said that markets would remain pressured at least until the incoming government proposes a deadline for the spending cap waiver.

☆ Brazil's Embraer narrows Q3 net loss, sees deliveries at lower end of outlook
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +2 min

SAO PAULO, Nov 14 (Reuters) - Brazilian planemaker Embraer SA (EMBR3.SA) on Monday reported a narrower third quarter net loss and boosted its free cash flow outlook for the full year, but acknowledged that annual deliveries were likely to stay at the lower end of its forecast. Embraer posted a quarterly adjusted net loss of 93.8 million reais ($17.62 million), narrower than the 179.7 million-real loss a year ago despite net revenue dropping 3% to 4.87 billion reais. The company increased its free cash flow outlook for the full year to $150 million or more from a previous estimate of $50 million or more, saying results so far have outperformed initial expectations. Santander analysts said the results missed their projections, but the reaffirmed delivery outlook was positive given the risks from supply chain issues. ($1 = 5.3250 reais)Reporting by Gabriel Araujo; Editing by Steven Grattan, Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

Investors have called for Lula to restore firm rules for public spending after major outlays by outgoing President Jair Bolsonaro through the pandemic and election campaign. Instead, Lula is pushing to dismantle old budget rules to ramp up social spending. Senator Simone Tebet, of the centrist Brazilian Democratic Movement party (MDB), said the economy minister should be his first cabinet pick to make clear what his policies are going to be affecting the economy. "An economy minister is needed to explain the president's political thought," she told reporters. The rout made clear that many investors want to see more clarity over ministerial appointments and how Lula aims to stabilize Brazil's public finances.

Lula insisted in a speech that he would maintain fiscal discipline, but his comments added to growing investor skepticism that he would keep a lid on spending. Concerns have been mounting about Brazil's public finances after major outlays through the pandemic and this year's presidential election. But his advisers are already discussing with lawmakers how to open room for more spending outside a constitutional spending cap in order to deliver on campaign promises, including a possible "Transition PEC" amending the constitution. "The signals indicate that the spirit of the Transition PEC is very oriented around new public spending. Still, as tough policy tradeoffs loom, and with Lula's economic team still being defined, markets have grown less patient.

☆ The Fed and other central banks could deliver a 'Santa Pause' rally for global stocks this year as they dial back the size of rate hikes, Schwab says
▼ + stars: | 2022-11-08 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

A "Santa Pause" rally for stocks may be taking shape as central banks signal a step-down in rate hikes, Charles Schwab said. The Fed and the BoE are among those indicating they're considering less aggressive rate hikes in the future. The Federal Reserve is among the central banks over the past week that has indicated a slower pace of rate increases. BoE's comment came as it kicked up its benchmark rate by 75 basis points, the largest increase in 33 years. The Bank of Canada last month unexpectedly raised its overnight rate by 50 basis points instead of an anticipated 75 basis points.

☆ Stocks fall, bond yields rise as focus shifts to Fed, rate outlook
▼ + stars: | 2022-10-31 | by ( Caroline Valetkevitch | ) www.reuters.com time to read: +4 min

The Fed, which begins its two-day meeting Tuesday, is expected to deliver a fourth straight 75-basis-point rate hike on Wednesday in its attempt to tame inflation. The pan-European STOXX 600 index (.STOXX) rose 0.35% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.44%. read moreKey food and energy prices drop after initial panicGRAINS REPORTIn currencies, the dollar rose 0.8% against the struggling yen to 148.62 yen . Brazil's currency and main stock index rallied Monday, a day after leftist Luiz Inacio Lula da Silva won the country's presidential election. The Bovespa stock index (.BVSP) sank 2% at the opening and ended the session up 1.3%.

[1/2] Brazil's former President and presidential candidate Luiz Inacio Lula da Silva and Sao Paulo Governor candidate Fernando Haddad react at an election night gathering on the day of the Brazilian presidential election run-off, in Sao Paulo, Brazil, October 30, 2022. Defeated President Jair Bolsonaro had not made public remarks more than 17 hours after the race was called. Some of his key allies have recognized publicly that Lula had won the race, easing concerns of contested election results. "There will be no transition problem, even if Bolsonaro reacts badly, most of his allies have already recognized Lula's victory". Francisco Levy, chief strategist at Empiricus Investimentos, said a favorable international reaction to Lula may help markets on the short term.

"It's a catch-up, or catch-down, kind of effect," said Galvin Chia, an emerging markets strategist at NatWest Markets. "There are some exceptional factors, but none of these would provide that kind of panacea for underlying risks that remain." Indonesia's foreign exchange reserves fell by $1.4 billion last month to $130.8 billion, due to debt payments and Bank Indonesia's efforts to stabilise the rupiah. read moreData for September also showed a surge in Indonesia's inflation to a seven-year high, reflecting a jump in fuel prices. "If you look at consumption, look at credit growth, everything is domestic, unlike the other export markets in Asia.

A man runs past banners with photos of presidential candidates, Brazil’s President Jair Bolsonaro, Ciro Gomes and former president Luiz Inacio Lula da Silva, in Rio de Janeiro, Brazil September 1, 2022. Faced with that and the likely return of a left-wing government in next month's election, some investors have moved to the sidelines. Despite this year's chaotic news flow, Petrobras has so far vindicated the bulls in the local market. "Petrobras shares are really cheap," said one Sao Paulo fund manager with about 20 billion reais ($3.9 billion) under management. Like many interviewed for this article, he requested anonymity to talk frankly about the state firm amid a heated election.

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