Reuters: US Dollar Report: EMERGING MARKETS-Brazil rate futures rise on industrial output data

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EMERGING MARKETS-Brazil rate futures rise on industrial output data Sep 4th 2012, 14:20 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Tue Sep 4, 2012 10:20am EDT * Brazil industrial production rises above forecasts in July * Investors await ECB meeting on Thursday for stimulus signs By Danielle Fonseca RIO DE JANEIRO, Sept 4 (Reuters) - Brazil's interest rate futures rose on Tuesday after official data showed the country's industrial production grew above expectations, suggesting the central bank may be able to cut short its monetary easing cycle. Uncertainty about additional monetary stimulus by central banks elsewhere left investors on the edge, though. The Mexican peso gained 0.3 percent while the Brazilian real weakened 0.4 percent as investors awaited the outcome of a key ECB meeting on Thursday. In Brazil, interest rate futures maturing in January 2014 rose 4 basis points to 7.79 percent after data showed industrial production grew 0.3 percent in July from the previous month, in a sign that sweeping government stimulus measures are beginning to bear fruit. Economists had expected zero growth in July from June, according to the median forecast a Reuters poll. The data, albeit positive, was still not enough to ensure the central bank will not cut interest rates again in October, said Paulo Nepomuceno, a fixed-income strategist with Coinvalores brokerage in Sao Paulo. "The contracts are rising on the back of slightly better industrial production numbers. The revised data was also positive, and that supported market sentiment," Nepomuceno said. "But the numbers were not extraordinary, considering that tax breaks to automakers helped a lot. It doesn't mean industrial production is improving as a whole." Expectations that the European Central Bank would give details of a program to help indebted euro zone members grew on Monday after ECB president Mario Draghi said that purchases of short-term sovereign bonds by the bank would not breach European Union rules. Still, investors remain cautious, hoping to see signs that key euro zone members will find common ground to implement the stimulus measures. Latin American FX prices at 1410 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0395 -0.42 -8.38 Mexico peso 13.1810 0.29 5.98 Argentina peso* 6.3200 0.32 -25.16 Chile peso 480.7000 -0.15 8.03 Colombia peso 1,824.9000 -0.05 6.22 Peru sol 2.6060 0.04 3.49 * Argentine peso's rate between brokerages Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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