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

To: wl9839 who wrote (15326)	5/17/1999 12:32:00 PM
From: Steve Fancy	Respond to of 22640

BRAZIL FOREX WEEK- Fidgeting on key rates meetings ReutersPlus, Monday, May 17, 1999 at 11:43 By Noriko Yamaguchi SAO PAULO, May 17 (Reuters) - The Brazilian real market <BRBY> should be jumpy this week with a tendency to weaken as traders brace for two key interest rate meetings which could slow foreign investment in the country, traders said. Foreign exchange traders are nervous ahead of Tuesday's U.S. Federal Open Market Committee (FOMC), the policy-making arm of the Federal Reserve, which could raise interest rates on the back of an unexpectedly high consumer price jump in April. The U.S. Labor Department on Friday reported that the Consumer Price Index (CPI) rose 0.7 percent in April, posting its sharpest monthly gain since October 1990. The Brazilian currency weakened after the news, with investors worried inflation in the United States could lead to higher interest rates, making high yields in emerging markets such as Brazil less attractive. "Brazilian markets hinge on the FOMC results this week," said Edson Barbosa de Souza, chief trader at Lloyds Bank in Sao Paulo. "An increase in U.S. interest rates could mean less foreign funds entering Brazil." Pressure ahead of the meeting was already weighing on the real in Monday morning trade, and the free-floating currency traded at 1.667 per dollar, 0.66 percent weaker from its Friday close. Tuesday's FOMC results could also influence credit policy shaped by top Brazilian Central Bank officials who Wednesday hold a key policy-making monthly meeting known as the Copom. The Central Bank last week reduced the reference rate on the market's benchmark Selic, which sets the yield on half of the government's domestic debt and serves as the basis for consumer loan rates, to 27 percent from 29.5 percent. The credit easing was the sixth such move in two months, and the Central Bank has now shaved 18 percentage points since it raised key lending rates to 45 percent following January's wrenching currency devaluation. The Central Bank was lowering the rates encouraged by lower Brazilian inflation figures, and money market traders expected the bank to slash rates yet again on Wednesday. Economists and market watchers said Selic's reference rate could be lowered to about 25 percent, or even lower depending on local price data. But currency players said Tuesday's FOMC results could alter the picture a bit. "Brazil's economic scenario could change depending on the FOMC and performance in U.S. Treasury bonds," Lloyds' Souza said. Players in the local stock market, which had recently been benefiting from stepped up foreign investment, were also worried about the FOMC. The market's bluechip stock index Bovespa (INDEX:$BVSP.X) lost 1.45 percent in early Monday trade. saopaulo.newsroom@reuters.com)) Copyright 1999, Reuters News Service

To: wl9839 who wrote (15326)	5/17/1999 12:35:00 PM
From: Steve Fancy	Respond to of 22640

Brazilian stocks slide with Wall St eyeing FOMC Reuters, Monday, May 17, 1999 at 12:07 SAO PAULO, May 17 (Reuters) - Brazilian stocks slumped nearly 3 percent at midday Monday, with investors concerned about declines in U.S. equity prices triggered by worries the Federal Reserve may move to a tighter policy stance, traders said. Sao Paulo's blue-chip stock index Bovespa (INDEX:$BVSP.X) fell 2.9 percent to 11,973 points in thin trade as investors waited for the outcome of Tuesday's U.S. Federal Reserve's Federal Open Market Committee (FOMC) meeting. "Investors see this a good opportunity to reap profits because they see a price adjustment from here on," said one local trader. "Depending on the FOMC results, we could see a little break in foreign investment flows, especially in the local stock market." If the FOMC adopts a tighter credit policy due to an unexpected jump in U.S. consumer inflation data reported last Friday, market watchers predict slower foreign investment in higher yielding emerging market instruments. The market's bellwether share Telebras preferred receipt (SAO:RCTB41) was down 1.67 percent to 165.20 reais, while Petrobras preferred (SAO:PETR4) was down 3.64 percent to 265 reais. saopaulo.newsroom@reuters.com)) Copyright 1999, Reuters News Service