Aurelia Butler

Prices were up 0.12% in the month, IBGE said in a statement, above market forecasts of 0.06%.That took annual inflation to 3.99%, up from 3.16% in the previous month and also beating the 3.93% expected by economists polled by Reuters.The fresh data came just as the central bank earlier this month kicked off a monetary easing cycle after maintaining its benchmark interest rate on hold at a six-year high of 13.75% for nearly a year in a bid to tame high inflation.The 50-basis-point cut announced on Aug. 2 was more aggressive than markets had expected, with the central bank signaling more of the same in the months ahead due to an improving inflation outlook.The uptick in annual inflation in July was already expected because of unfavorable base effects, and economists do not project the latest figures to change the central bank’s stance on the rate cuts.”The jump in Brazilian inflation last month won’t stop Copom from lowering interest rates at its September meeting,” said Capital Economics’ chief emerging markets economist, William Jackson.”By the same token, however, the figure probably rules out the possibility of a larger rate cut than the 50 basis points delivered earlier this month,” he added.Inflation in July was driven by higher transportation costs due to an increase in fuel prices, the statistics agency said. Food and housing costs, on the other hand, dropped in the month.Annual inflation, despite the increase last month, remains within the central bank’s target range of 1.75% to 4.75% for this year.”Inflation remains close to its cyclical low, despite the uptick last month, and inflation expectations are falling,” said Pantheon Macroeconomics’ chief Latin America economist, Andres Abadia.”The inflation rate will edge marginally higher over the coming months, but underlying conditions will remain favorable for the central bank to keep cutting rates.” More

FRANKFURT (Reuters) – A Munich-based property developer said on Friday it had filed to open insolvency proceedings with a local court, in the latest sign of stress in Germany’s real estate sector.Euroboden GmbH, with 115 million euros ($126 million) in bonds outstanding and facing possible downgrades in its credit rating, said in a statement that negotiations for property sales had fallen through, hurting its finances.It also cancelled a meeting with bondholders later this month, where it had hoped to restructure its debt.”The market outlook for project developers continues to be negative,” Euroboden said, citing high construction costs and interest rates, a slump in demand, and difficulty in getting credit.Germany has long benefited from an era of cheap money that fuelled a boom in real estate, but now the sector is grappling with a major turn of fortune. New building permits and construction have plummeted as residential property prices fall and construction job growth stagnates.Euroboden was founded in 1999 and expanded to Berlin and elsewhere during a decade-long property boom.Though not large – it made a net profit of 25 million euros and counted 55 employees when it marketed its latest bonds – Euroboden underscores broader sector troubles as the latest in a wave of insolvencies. Earlier this week, Duesseldorf-based company Development Partner said it had also filed for insolvency, and in July, property developer Centrum Group did so too, citing a “toxic triangle” of cost increases, higher interest rates and stalled investment.Weakness in real estate has also emerged in the United States and Sweden.Germany is Europe’s largest economy and the biggest real estate investment market on the continent. The property sector accounts for roughly a fifth of Germany’s economic output and one in ten jobs. In a July investor presentation, Euroboden said it had hoped to extend its bonds by three years, and it was refocusing on core business in Munich and Berlin after closing an office in Frankfurt.($1 = 0.9092 euros) More

Global oil demand has hit a record and may move higher in August, threatening to prolong a recent rally in crude prices, the International Energy Agency said on Friday.Demand reached an all-time high of 103mn barrels a day in June driven by better than expected economic growth in OECD countries, strong summer air travel and surging oil consumption in China, particularly for petrochemical production, the IEA said in its monthly oil report.The data on rising global oil consumption shows that global efforts to cut carbon emissions are yet to have a significant impact on oil demand, just as the summer in the northern hemisphere has been rocked by record temperatures and wildfires.The IEA said demand could hit another peak this month and was on track to average 102.2mn b/d in 2023, the highest ever annual level. It means demand will have risen by 2.2mn b/d over the course of the year, with 70 per cent of the growth coming from China, the IEA said.Rising demand has pushed oil prices higher in the past month, aided by cuts in supply made by Saudi Arabia and Russia.Production from Opec+ countries dropped in July to the lowest level since October 2021 after Saudi Arabia, which leads the group, cut its own output by 1mn b/d in a move to shore up prices. It said last week that it would extend the cut into September and could even reduce output further. The measure, combined with output cuts made by Russia, will plunge Opec+ output in the third quarter to a two-year low, according to the IEA’s forecast.Brent crude, the international benchmark, was trading at $87 a barrel on Friday, up 10 per cent over the past month, with some analysts predicting a return to $100 a barrel oil this year.The rallying crude price has already provoked concern in the US, where petrol costs have reached a nine-month high just as President Joe Biden steps up his bid for re-election next year.Oil demand was expected to rise again in 2024 but at slower rate, the IEA cautioned, as it trimmed its demand growth forecast for 2024 by 150,000 b/d.“With the post-pandemic recovery having largely run its course and as the energy transition gathers pace, growth will slow to 1 mb/d in 2024,” it said.The growth would be driven by China again, with 60 per cent of the additional in demand coming from the country, it added. More

BUENOS AIRES (Reuters) – Argentina’s monthly inflation rate likely sped back up to 7.1% in July, a Reuters poll of analysts showed, a blow for the ruling Peronist coalition, which is battling to avoid defeat by the conservative opposition in primary elections on Sunday.The sharper expected rise in the Consumer Price Index (CPI) would halt a run of slowing monthly inflation readings since a peak of 8.4% in April and underline how hard to budge inflation has become in the embattled South American nation.Argentina has one of the highest inflation rates in the world, with the annual reading near 116%, which hammers earning power, has forced the government to hike the interest rate to 97%, and seen it burn through dollars to protect the peso.”The monthly increase exceeded that of June, in part due to a spike in tourism linked to the winter holidays, which saw big moves in recreation (prices) in the month,” said consultancy C&T Asesores Económicos.The projections from 19 local and foreign analysts ranged from a minimum 5.9% rise to a maximum 7.9% jump in the month.The peso currency, controlled in official markets by tight capital controls, has in recent days hit record lows of over 600 to the dollar in parallel markets, more than twice the formal price. That’s stoked further price rises, analysts said.”We saw a significant acceleration in the vast majority of prices surveyed during the month, especially from the third week (of July), coinciding with the sky-rocketing of the black-market peso and new government measures,” added consultancy C&T.Argentina’s government in late July ordered measures to encourage exports of some products and discourage imports with the goal of protecting central bank foreign currency reserves, estimated to be deep in negative territory on a net basis.Alejandro Giacoia, economist at consultancy Econviews, said the spike in prices was partially linked to the slide in the peso in parallel markets, as well as rising food prices, which would play into August inflation too.Many analysts saw a tough outlook for prices in the months ahead due to economic uncertainty, fiscal imbalances, and volatility ahead of the general election in October.”There are several factors that we believe mean CPI will continue to accelerate in August,” said Eugenio Marí, chief economist of the Libertad y Progreso consultancy, citing market imbalances, government money printing and new taxes.Argentina’s INDEC statistics agency is expected to publish inflation data next week after the primaries. The central bank has postponed the regular publication of its monthly market analyst survey until after the election. More

According to Refinitiv Lipper data, investors withdrew about $14.96 billion from U.S. equity funds during the week, their biggest week of net selling since June 21.Wall Street stocks posted big losses last week, with the S&P 500 and the Nasdaq registering their biggest weekly declines since March as investors took profits after five months of gains.Also tempering investor appetite, credit rating agency Moody’s (NYSE:MCO) downgraded 10 small- to mid-sized U.S. lenders on Monday and placed another six banks on review for potential downgrades.Investors sold out of U.S. large-, mid-, and multi-cap funds to the tune of $14.95 billion, $543 million and $261 million, respectively, but small-cap funds still drew about $748 million in inflows.By sector, materials, financials and tech saw net sales of $891 million, $554 million and $524 million, respectively. Meanwhile, healthcare funds received $1.39 billion, the most in a week since March 2022.Meanwhile, U.S. money market funds and government bond funds attracted $40.88 billion and $4.48 billion, respectively, as investors hunted for safety.On a combined net basis, U.S. bond funds received $3.99 billion in inflows, compared with about $938 million of outflow in the previous week.U.S. general domestic taxable fixed income and short/intermediate investment-grade funds received about $800 million each in inflows. On the other hand, high yield and loan participation funds saw net sales of $565 million and $419 million, respectively. More

Investors ploughed $73.17 billion into money market funds in their biggest weekly net purchase since March 22, data from Refinitiv Lipper showed.Inflation data released on Thursday showed U.S. consumer prices increased moderately in July, boosting expectations that the Federal Reserve will leave interest rates unchanged next month. Weak economic data from China, where exports and imports contracted in July, also affected risk sentiment. U.S. money market funds attracted a net $40.88 billion in inflows while in Europe and Asia net inflows stood at $23.4 billion and $13.15 billion, respectively.Higher-risk equity funds suffered $11.71 billion worth of net selling, the biggest weekly outflow since June 21.Investors exited metals & mining, financials and tech sector funds by around a net $891 million, $554 million and $524 million, respectively, while healthcare drew about $1.39 billion in net inflows.Global bond funds were in demand for a seventh successive week, attracting a net $7.04 billion.Global corporate bond funds drew about $1.16 billion and government bond funds a net $2.71 billion, the biggest amount since July 12.Among commodity funds, precious metal funds suffered an 11th weekly outflow, of about $810 million, and a net $163 million left energy funds.Data for 24,043 emerging market funds showed that investors placed about $264 million into equity funds in a fifth straight week of net buying. Meanwhile, bond funds faced their biggest weekly net outflow in nine months at a net $1.74 billion. More