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Landers, who was born in Brazil but has lived in the U.S. for decades, is one of the few names from foreign shops who’s bullish on the South American country. Foreign investors have pulled 9 billion reais ($2.35 billion) from Brazilian shares this year, on pace for the worst exodus since at least 2010, as they wait for more clarity on whether President-elect Jair Bolsonaro can deliver on promises to shore up the budget.
(Bloomberg) -- Emerging markets rebounded as central banks including those of Indonesia and Mexico signaled commitment to support their currencies. Signs of progress in resolving U.S.-China trade frictions bolstered riskier assets later in the week.
The U.K. showed early in this decade that it is more prone to inflationary pressure than other leading developed economies, as the pass-through from the sharp depreciation in sterling that accompanied the financial crisis drove up consumer prices. One is, of course, Brexit. Mark Carney, the governor of the Bank of England, has made clear that the bank must “prepare for the worst,” which would be a “no-deal” Brexit in which the U.K. suddenly exited the EU in March with no clear arrangement to follow.
The global bond market is tumbling, pushing borrowing costs to their highest since 2013. The escalating trade war between the U.S and China shows no signs of ending anytime soon — and may be getting worse. Italy looks to be headed toward a fiscal crisis and showdown with the European Union.
Emerging-market currencies rounded off a winning month, defying the prospect of further rate hikes by the Federal Reserve, as more developing-nation central banks deployed tighter monetary policies to backstop local markets. Trade tension between China and the U.S. escalated as some $200 billion of Chinese products became subject to U.S. tariffs on Sept. 24, on top of $50 billion of existing levies.
Emerging-market stocks, currencies and bonds were unfazed by an escalation in the U.S.-China trade dispute, rising for a second week as the dollar retreated. The Chinese yuan had its first weekly gain this month as Premier Li Keqiang said the country won’t devalue its currency in order to make its exports more competitive amid trade tension with the U.S.
This was supposed to be Brazil’s breakout year. During the ensuing 12 months, $1.3 billion poured into Latin America’s largest economy through exchange traded funds, making it a top-10 nation among investors. The biggest of them, BlackRock’s MSCI Brazil ETF, suffered its worst outflows since inception in 2000.
Forget all the talk about an escalating trade war damaging the U.S. economy or that the coming midterm elections threaten to throw the political system into disarray. In fact, they are loading up on super-safe cash-like instruments as bets on the Federal Reserve raising interest rates two more times before year-end reach a new high. Demand at the U.S. Treasury's bill auctions this week were on the high side, especially for 52-week bills.
Brazilian markets dropped as a poll showed left-wing candidates gaining support while those favored by investors stalled out with less than a month to go until the presidential election. The real and the benchmark stock index were the worst performers among major markets globally Tuesday, erasing all gains posted after last week’s knife attack targeting conservative Jair Bolsonaro spurred speculation his candidacy would get a boost. Candidates on the left, who investors fear would backtrack on efforts to shore up Brazil’s fiscal accounts, were the only ones who gained support at a level that exceeded the margin of error in a Datafolha poll released last night.