EMERGING MARKETS-Brazil rate futures flat after cenbank cuts rates by 100 bps
By Bruno Federowski SAO PAULO, April 13 Yields on Brazilian interest rate futures were flat on Thursday after the central bank cut rates by an expected 100 basis points but refrained from signaling a steeper reduction ahead. In a unanimous vote, the bank agreed on the deepest cut in nearly eight years, bringing the overnight Selic lending rate to an almost two-year low of 11.25 percent. Despite calls from some politicians and business leaders for the central bank to be even more aggressive, the policy statement announcing the decision suggested it would keep the current pace of cuts for now. JPMorgan economists wrote in a note to clients: "At the current juncture, we keep our call for another 100bp cut at the May meeting, followed by one cut of 75 basis points in July and a final 50 basis-point cut in September." Rate future yields indicated an 80 percent probability of a 100 basis-point cut in May, with a 20 percent chance of a 125 basis point reduction, traders said. The Brazilian real firmed 0.4 percent, tracking other Latin American currencies higher after U.S. President Donald Trump said that the U.S. dollar was getting too strong and he would prefer the Federal Reserve to keep interest rates low. Brazil's benchmark Bovespa stock index, however, was nearly flat. Shares of planemaker Embraer SA fell 2.6 percent, leading losses on the index, after disappointing first-quarter delivery figures. Analysts at Morgan Stanley Securities cut the price target on U.S.-listed Embraer shares to $23 from $27. Key Latin American stock indexes and currencies at 1500 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 963.86 0.59 11.13 MSCI LatAm 2633.66 0.87 11.54 Brazil Bovespa 63920.55 0.05 6.13 Mexico IPC 48955.82 -1.37 7.26 Chile IPSA 4863.18 -0.02 17.15 Chile IGPA 24373.17 -0.01 17.55 Argentina MerVal 20812.17 -0.86 23.02 Colombia IGBC 10250.56 0.22 1.21 Venezuela IBC 47030.02 0.47 48.34 Currencies daily % YTD % change change Latest Brazil real 3.1195 0.41 4.16 Mexico peso 18.5175 0.15 12.02 Chile peso 648.4 0.48 3.44 Colombia peso 2869.25 -0.07 4.61 Peru sol 3.254 0.00 4.92 Argentina peso (interbank) 15.1700 0.66 4.65 Argentina peso (parallel) 15.64 0.32 7.54 (Reporting by Bruno Federowski; Editing by Dan Grebler)