|To: Glenn Petersen who wrote (2090)||11/5/2020 11:21:42 AM|
|EMERGING MARKETS-Stocks climb and rouble slips as Biden inches towards presidency|
By Ambar Warrick
3 MIN READ
* MSCI EM stocks index at highest since May 2018
* Hungarian forint leads gains across CEE FX
* China’s yuan at 28-month high
Nov 5 (Reuters) - Russia’s rouble suffered on Thursday while China’s yuan and emerging market stocks scaled multi-year highs as Joe Biden moved closer to victory in a tight U.S. election race.
Democrats are unlikely to win the Senate, however, and markets were trying to assess the implications of a potential U.S. policy gridlock.
Developing markets that might suffer from a Biden win nursed some losses. Russia’s rouble slipped as much as 1.5% before paring back some losses to trade 0.2% lower against a softer dollar, with a fall in oil prices adding to the pressure.
“A potential Biden victory will prevent the rouble from benefiting from overall market sentiment,” said Piotr Matys, emerging markets FX strategist at Rabobank. “This risk of the U.S. imposing sanctions on Russia will continue to weigh.”
However, Russia’s rouble firmed on the Moscow Exchange which was closed for a public holiday on Wednesday.
Many other developing currencies enjoyed healthy gains. Mexico’s peso - a weather vane for U.S. trade relations - strengthened more than 1%. China’s yuan hit a 28-month high as the growing prospects of a Biden presidency raised hopes of a less tense U.S.-China trade relationship.
“Trump looks more hawkish on China and if he got another four years, his tough anti-China activities will intensify,” Hao Zhou, senior economist at Commerzbank wrote in a note.
“While Biden is also likely to take a hard approach on China, the new administration might need some time to frame the new policy, which might give China some room to breathe.”
South Africa’s rand rose 0.3% against the dollar while Hungary’s forint led gains across central European currencies with a 0.7% jump against the euro.
Many emerging market hard-currency bonds joined the rally. Mexico’s longer-dated sovereign dollar bonds jumped more than 5 cents in the dollar to multi-month highs, with bonds in other developing economies adding to Wednesday’s gains.
The Czech crown edged up against the euro ahead of a central bank meeting later in the day, where interest rates are likely to remain unchanged.
Emerging market stocks raced to their highest level since May 2018, with bourses in China, Russia and South Africa rising between 1% and 3%. The MSCI’s index of emerging market stocks was set for its best day since July.
For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Karin Strohecker and David Clarke)
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|To: Glenn Petersen who wrote (2090)||11/6/2020 2:29:28 AM|
|We will have a reversion to pre 2013 conditions.|
ANY printed money will end up in Brazil, Mexico and Indonesia.
The effects of the measures taken post 2013 will be reverted and that will benefit the Emerging Markets.
Here is what happened from 2013 onwards:
Taper Tantrum, FED toying with higher interest rates, the lower corporate taxes that repatriated US$ back to the US all that drew capital from EMs.
Any time in the past that this big inflow of capital into the developed countries happened, it created excesses in the developed cpuntries.
Remember the late 1980s? Yuppies with yellow ties. BMW the Ultimate machine? Ok, you saw Gordon Gecko, Wall Street, don't you? That happened. and was financed, on the back of the debt crisis that took a gigantic amount of capital from EMs to developed countries
Fast forward to 1997-98 Asian Meltdown. That excess of capital repatriated created the Tech Bubble, which was much bigger than anything we have witnessed before.
Any time the excesses overwhelm the developed countries, capital returns to EMs. From the exit of the Gold Standard by Nixon, to Clinton's Washington Consensus, capital always returned to EMs completing the cycle.
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|To: elmatador who wrote (2123)||11/7/2020 2:50:57 AM|
|Brazil-s normal is end of January 2020. |
The country had entered 2020 burning rubber
BOVESPA Index 119K.
Then we had 10 months of the Covid thing interfering with the Brazilian economy.
You can see that by July the trend pointed back to January but we had the US elections campaign and the 'Covid Numbers Machine' in full swing. Now it will go back to the January normal.
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|From: elmatador||11/24/2020 12:33:42 AM|
|The Brazilian economy is benefiting from a new policy mix of low interest rates and a weaker currency, boosting domestic demand and exports, Guedes said during a webcast.|
Earlier, the Central Bank reported that its economic activity index, considered a proxy for gross domestic product, rose 9.47% in the July-September period compared to the previous three months.
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|To: kidl who wrote (2120)||11/27/2020 5:33:34 AM|
|Brazil Is Emerging As The World’s Leading Offshore Oil Producer|
By Editorial Dept - Nov 15, 2020, 12:00 PM CST
Sharply weaker oil prices, the COVID-19 pandemic, and heightened geopolitical uncertainty have done little to blunt Brazil’s epic offshore oil boom. By September 2020 Brazil had soared to be the third-largest supplier of crude oil to China, the world’s second-largest economy. The scale of Brazil’s deep-water offshore oil boom is underscored by the pre-salt Tupi oilfield which for the third quarter of 2020 reached the impressive milestone of having pumped two billion barrels of accumulated oil production in the decade since commercial oil production began. A key reason for this is the rapidly growing popularity of the sweet medium crude oil grades produced from Brazil’s pre-salt oil fields, notably Tupi the world’s largest deep-water oilfield, and the Buzios field.
Petrobras, which is spearheading the development of Brazil’s vast offshore pre-salt oil fields reported record crude oil exports for September 2020 of which around 87% were bound for China.
There are signs that Brazil’s offshore oil boom will continue unimpeded despite China’s oil imports slowing.
Petrobras Chief Executive Roberto Castello Branco believes China has the capacity to absorb all the crude oil produced for export by Brazil, even with that output growing at a steady clip.
The growing popularity of Brazil’s sweet medium grade Lula and Buzios crude oils pumped from the Tupi and Buzios fields sees them selling at a premium to Brent in China. Soaring demand for those crude oil blends is causing their price differentials to widen further, sparking speculation that they could become the world’s most expensive crude oil varieties.
Petrobras is actively seeking new export markets in Asia where the demand for light sweet grades of crude oil is growing because of the push for higher quality low sulfur content gasoline, diesel, and maritime fuels. India has become a key target market.
The world’s fifth-largest economy, prior to the COVID-19 pandemic, was expanding at a solid clip boasting GDP growth of up to 8% in recent years, making it the fastest-growing major economy globally. While the IMF predicts that India’s economy will contract by over 10% during 2020 it is expected to return to growth in 2021 with the IMF anticipating an impressive 8.8% annual year over year GDP growth rate. India’s solid economic growth coupled with a large, growing, and increasingly wealthy population will cause the demand for energy and fuels to rise significantly. U.S. sanctions that prevent Indian refiners from purchasing Venezuelan crude oil have forced them to look elsewhere, while the introduction of IMO2020 this year has substantially boosted demand for sweet crude oil in Asia.
The new maritime regulations also triggered a lift in demand for Brazil’s medium sweet crude oils from Singapore, which is a regional shipping hub.
This rising demand for Brazil’s pre-salt sweet medium crude oil grades will be met by growing supply. Despite the COVID-19 pandemic and sharply weaker oil prices after the March 2020 price crash, Brazil’s pre-salt production is expanding. Data from Brazil’s national petroleum regulator, the National Agency for Petroleum, Natural Gas and Biofuels (ANP - Portuguese initials), shows September 2020 (in Portuguese) pre-salt oil production of almost 2.6 million barrels daily, which was 13% greater than a year earlier.
That saw pre-salt oil output responsible for 89% of Brazil’s total petroleum output for the period compared to 78% for the equivalent month in 2019.
The volume of sweet medium crude oil pumped from Brazil’s pre-salt oil fields will keep expanding. Petrobras, which is responsible for over 60% of Brazil’s pre-salt oil production, is investing in ramping-up activity at its pre-salt assets, notably the Buzios oilfield. Brazil’s national oil company recently announced the $353 million purchase of the stakes of Shell and Petrogal Brasil, a subsidiary of Portugal’s Galp Energia, in the floating production storage and offloading vessel P-71.
The FPSO was to be deployed in the Tupi field but Petrobras has chosen to place the vessel, which has 150,000 barrels daily of production capacity, at the Itapu oil discovery. Brazil’s national oil company expects to bring Itapu online during 2021, significantly earlier than the planned 2024 start date. For that reason, Petrobras, the owner of 65% of the Tupi oilfield, has engaged partners Shell, which has a 25% stake, and Petrogal, the owner of the remaining 10%, to design a new development plan for Tupi which will be delivered to the ANH in 2021. Tupi’s considerable potential is underscored by Galp’s belief that the deep-water oilfield has up to 20 billion barrels of oil in place.
Production from the Buzios pre-salt field is growing at a rapid clip reaching an average of 604,000 barrels daily for the third quarter of 2020, or just over a third of Petrobras’ total pre-salt oil output for the period. For September 2020 alone, Buzios produced an average of 749,810 barrels of oil daily which while 1% lower than August 2020 was an impressive 84% greater than the same period during 2019.
The sweet medium crude oil, which has an API gravity of 28.4 degrees, a low sulfur content of 0.31%, and low aromatics, is rapidly growing in popularity among Asian refiners. In response to this rising demand, mainly from China, Petrobras is ramping up activity in the field. Brazil’s national oil company plans to have 12 FPSOs installed in the Buzios field by 2030 which is anticipated will be pumping more than 2 billion barrels of crude daily, making it Brazil’s largest oilfield.
While peak oil demand, which is expected to occur in 2030, and sharply weaker oil prices are weighing on petroleum investment, strong demand for Buzios crude oil and low breakeven costs, that are estimated to be $35 per barrel, underscore the reasons for Petrobras’ significant investment in the oilfield.
Brazil is fast shaping up to the world’s premier offshore oil boom. A combination of vast oil potential, extremely low sulfur light and medium crude oil blends, and growing demand from refiners for sweet lighter crude oil coupled with low breakeven costs makes it a highly appealing jurisdiction for investment from global energy majors. For these reasons, investment will keep flowing into Brazil’s pre-salt oil basins bolstering the Latin American country’s proven oil reserves and production despite the headwinds posed by the COVID-19 pandemic, sharply weaker oil prices, and the emergence of peak oil demand.
By Matthew Smith for Oilprice.com
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