{"id":131652,"date":"2024-11-30T05:01:54","date_gmt":"2024-11-29T22:01:54","guid":{"rendered":"https:\/\/hotvideos24.online\/?p=131652"},"modified":"2024-11-30T05:01:54","modified_gmt":"2024-11-29T22:01:54","slug":"brazil-markets-cap-week-of-losses-after-spending-plan","status":"publish","type":"post","link":"https:\/\/hotvideos24.online\/?p=131652","title":{"rendered":"Brazil Markets Cap Week of Losses After Spending Plan"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->(Bloomberg) &#8212; Brazilian markets wrapped up a turbulent week after a much vaunted plan to cut government spending came in well short of expectations, adding to angst over the country\u2019s budget.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Most Read from Bloomberg<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->The package, detailed by Finance Minister Fernando Haddad on Thursday, sent the currency tumbling to an all-time low, and stocks down the most since 2023. Losses extended early Friday as US markets came back from a holiday, with the real dropping as much as 1.7% before rebounding as Haddad, along with Congress leaders, tried to reaffirm their commitment to fiscal constraint.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Even with the bounce, the currency fell 2.8% this week, by far the worst in emerging markets. The nation\u2019s benchmark Ibovespa stock index, which also recouped some losses on Friday, dropped 2.7% on a weekly basis.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u201cWe need to see spending grow within the limits of the fiscal framework,\u201d said Andr\u00e9 Muller, chief strategist at AZ Quest Investimentos Ltda. \u201cThey will have to prove that the framework is sustainable. The main factor that will determine asset prices next year will be the fiscal story.\u201d<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Investors have rushed to dump Brazil assets this year amid concern over the nation\u2019s growing debt levels as President Luiz Inacio Lula da Silva increases spending to fulfill pledges of improving living standards for the poor. Data on Friday showed the nation\u2019s nominal budget deficit widened to 74.68 billion reais in October, from 53.8 billion reais the previous month. Economists had projected a deficit of 50.1 billion reais.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u2018Throwing in the Towel\u2019<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->A long-awaited plan unveiled by Haddad to cut 70 billion reais ($11.6 billion) from public spending through 2026 was seen as insufficient to stabilize the growing budget deficit. Lula\u2019s decision to tack on a tax exemption measure for the poor only added to concerns, watering down the package\u2019s savings and signaling a lack of buy-in from the left-wing president to a fiscal adjustment.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u201cThe announcement of the fiscal package was perhaps the government\u2019s last chance to signal that it\u2019s concerned about the debt trajectory,\u201d said Rafael Oliviera, an equity fund manager at Kinea Investimentos. \u201cLocal investors are throwing in the towel.\u201d<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->The growing distrust of the government\u2019s fiscal commitment has hit inflation expectations, pushing the central bank to hike interest rates just as the Federal Reserve eases monetary policy. Swap rates have surged, with markets pricing in a hike of 92 basis points in the benchmark Selic rate in December and another 87 points in January.<!-- HTML_TAG_END --><\/p>\n<p><button class=\"secondary-btn fin-size-large readmore-button rounded   yf-15mk0m\" data-ylk=\"elm:readmore;itc:1;sec:content-canvas;slk:Story%20Continues\" aria-label=\"Story Continues\" title=\"Story Continues\"> <span>Story Continues<\/span> <\/button> <\/p>\n<div class=\"read-more-wrapper\" style=\"display: none\" data-testid=\"read-more\">\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u201cThe Brazilian market is very sensitive to negative fiscal headlines and will continue to apply a higher risk premium absent comprehensive structural changes to fiscal expenditures,\u201d said Katrina Butt, a senior economist at AllianceBernstein in New York. \u201cThe question now is how the central bank will incorporate this new information.\u201d<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Gabriel Galipolo, who\u2019ll take over as central bank governor next year, said late Thursday that the monetary authority is concerned about unanchored inflation expectations and that Brazil may need higher rates for longer. He stuck to that same tone Friday, saying Brazil could lift rates to anchor expectations.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Lula on Friday nominated three new central bank board members, as investors pressure for more aggressive rate hikes to tame inflation. The nominees include Nilton David, the head trader on Banco Bradesco SA\u2019s treasury desk, as director of monetary policy. Brazil\u2019s Senate will have to confirm all of the nominees.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->On Thursday JPMorgan projected the Selic will hit 14.25% by the end of the tightening cycle, up from a previous forecast of 13%. Borrowing costs are currently at 11.25%.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->The slide in Brazil markets also comes amid a broad drop in emerging assets following Donald Trump\u2019s election in the US in anticipation of higher global rates and a stronger dollar. But the selloff in local assets stands out: the real is down almost 19% this year, the worst performer among major currencies. The Ibovespa stock index has lost more than 6% over the same period, also lagging EM stocks and most global benchmarks.<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u201cThe government\u2019s signaling was clear: the political agenda is more important than the fiscal agenda,\u201d said Marcos de Marchi, chief economist at Oriz Partners. \u201cA very big window of opportunity was missed.\u201d<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->(Updates pricing starting in second paragraph, adds analyst commentary)<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->Most Read from Bloomberg Businessweek<!-- HTML_TAG_END --><\/p>\n<p class=\"yf-1pe5jgt\"><!-- HTML_TAG_START -->\u00a92024 Bloomberg L.P.<!-- HTML_TAG_END --><\/p>\n<\/div><\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><div data-type=\"_mgwidget\" data-widget-id=\"1660802\">\r\n<\/div>\r\n<script>(function(w,q){w[q]=w[q]||[];w[q].push([\"_mgc.load\"])})(window,\"_mgq\");\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/finance.yahoo.com\/news\/brazil-markets-set-worst-week-131011512.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Bloomberg) &#8212; Brazilian markets wrapped up a turbulent week after a much vaunted plan to cut government spending came in well short of expectations, adding to angst over the country\u2019s &hellip; <a href=\"https:\/\/hotvideos24.online\/?p=131652\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-131652","post","type-post","status-publish","format-standard","hentry","category-business","entry"],"_links":{"self":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/131652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=131652"}],"version-history":[{"count":0,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/131652\/revisions"}],"wp:attachment":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=131652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=131652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=131652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}