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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: md1derful who wrote (12263)	1/22/1999 1:15:00 PM
From: Steve Fancy	Respond to of 22640

Thanks Doc, I agree now would probably be a good time to look at shorting puts...or covered call writing as one guy did last week. Huge premiums in just out of the money calls...especially out a month or so. I must add, I'm tapped on shorted puts in Brazil. I'm waiting to see where the late afternoon takes us and will proabably bail from my puts for the weekend.

To: md1derful who wrote (12263)	1/22/1999 1:17:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Real Steadies as Govt Sells Dollars, Interest Rate Futures Soar Sao Paulo, Jan. 22 (Bloomberg) -- The Brazilian currency steadied as interest rate futures soared and government-owned Banco do Brasil SA sold dollars to reverse an early decline, traders said. Traders said Banco do Brasil, which typically operates in the market on behalf of the central bank, sold dollars at a rate of 1.60 reais to the dollar. The real strengthened to 1.65 per dollar from as low as 1.76, then settled at 1.715, down 1 percent from yesterday. The government left overnight interbank interest rates unchanged at 32.50. Interest rate futures for March soared to 63 percent, indicating that investors think the central bank may be forced to raise interest rates to lure dollars back into the country. ''The market is still nervous,'' said Sergio Machado, a money market trader at Banco Fator SA in Sao Paulo. ''We're going to have to live with this for some time. Building back confidence takes time.'' Capital outflows of $6.9 billion this month has drained the supply of foreign exchange at commercial banks, boosting the value of the dollar and hurting the real. Intervention The central bank's willingness to sell dollars has become increasingly important as private sector banks' supply is eroded by companies and banks payments of expiring bonds and other obligations abroad. Banks and exporters, two of the main providers of dollars in the market, have declined to sell, hoping their dollars will rise even more. Banco do Brasil said its foreign exchange operations were ''normal,'' though money market traders said there was little doubt of a government intervention. ''The central bank is the one that would go into the market for this kind of operation,'' said Eduardo Braga, manager of Banco do Brasil's international area. The central bank is reluctant to intervene in the market because its reserves, not including $9 billion from the International Monetary Fund, are hovering at less than $30 billion, about $10 billion from a level at which it would have to renegotiate its entire $41.5 billion IMF aid package. -------------------------------------------------------------------------------- © Copyright 1999, Bloomberg L.P. All Rights Reserved. latinvestor.com