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Jonathan Wheatley

Jonathan Wheatley is the FT's deputy emerging markets editor. He was Brazil correspondent from 2005 to 2011, when he moved to London. He lived in São Paulo from 1992, writing for the FT, Business Week, the Economist Intelligence Unit and many others. He previously worked in television news, current affairs and documentaries in London.

As Brazil’s polling day draws closer, another data point emerged on Friday for the voters’ consideration: consumer price inflation is back above the upper limit of the government’s target range and shows no sign of falling back soon.

The IBGE, Brazil’s statistics office, said CPI in the month to mid-September was 0.39 per cent, bringing the accumulated rate over the past 12 months to 6.62 per cent. That was above the consensus forecast of 0.35 per cent for the month, according to Bloomberg. Continue reading »

On Valentine’s Day 2011, a court in Ecuador ordered Chevron, the US oil major, to pay $19bn to indigenous peoples and villagers to compensate for pollution caused between 1964 and 1990 by Texaco, which Chevron had bought in 2001. It was the biggest award ever against a corporation outside the US and was hailed by environmental and other campaigners worldwide as a landmark victory for usually voiceless and defenceless peoples over the usually all-powerful Big Oil.

But Chevron felt it had been treated unfairly and counter-sued in the US. On March 4 this year, Judge Lewis Kaplan of the US District Court in New York found Steven Donziger, the US lawyer who represented the Ecuadorian plaintiffs, liable for leading a multifaceted racketeering conspiracy. Continue reading »

Is this month’s bear run in EM equities merely a correction or the start of something big? As fast FT reports, the FTSE Emerging Market index is heading for its longest sustained losing streak since September 2001.

Anyone looking for signs of a structural shift will be interested in the chart below from Fitch Ratings, showing an improvement in both ratings and outlooks in the developed world that is the opposite of a strongly negative trend in EM this year. Continue reading »

Another week and yet another cut in the consensus on Brazilian GDP growth this year. The central bank’s weekly survey of 100 market economists has notched up 16 consecutive weeks of downward revisions to bring the consensus on GDP growth to just 0.33 per cent this year. The outlook for 2015 also fell, to 1.04 per cent.

At least the central bank’s survey is not alone. The OECD, also on Monday, in its latest Economic Outlook cut its forecast of Brazilian growth to just 0.3 per cent this year and 1.4 per cent in 2015. That’s down from an expected 1.8 per cent in 2014 and 2.2 per cent in 2015 at the OECD’s last Economic Outlook in May. Continue reading »

Is the tide changing in Brazil’s election? Barclays Research issued a note on Thursday afternoon changing its base case scenario to one in which Marina Silva defeats Dilma Rousseff, the incumbent, at the presidential election on October 5. Continue reading »

Many emerging market investors are fixated on when the US Federal Reserve will begin raising interest rates and what the impact will be on EM assets. But Luis Costa, head of CEEMEA rates and foreign exchange strategy at Citi, reckons the “dollar surge” and the associated EM sell-off has already begun.

“FX is sensing the end of this benign cycle much earlier than other asset classes,” he tells beyondbrics. “It looks as though the dollar surge started at the beginning of July, with EM low yielders responding first. But now many high yielders are joining the dance.” Continue reading »

With every passing week, the gloom over Brazil’s economy gets a little deeper. The central bank’s latest weekly survey of market economists shows that the consensus for GDP growth this year has fallen for its 15th consecutive week and is now just 0.48 per cent.

Investors dismayed by the interventionist, sectoral industrial policies pursued by President Dilma Rousseff – up for re-election on October 5 – may be even more dismayed to see their latest predicted results: industrial production is expected to fall by 1.98 per cent this year, from a fall of 1.53 per cent four weeks ago. Continue reading »

Brazil’s presidential election on October 5, previously seen as a shoo-in for the incumbent Dilma Rousseff of the leftwing PT, was thrown wide open last month by the death in an air crash of Eduardo Campos of the centre-left PSB, lying third in opinion polls. His running-mate, the much better known Marina Silva, a former environment minister with a compelling story of personal struggle from jungle poverty to national prominence, has surged ahead to take the lead in the polls.

Investors have gone almost dizzy with excitement. Their thinking is that an opposition victory would mean less of the statist, interventionist, ad hoc policy-making seen under Rousseff and more of the market-friendly, across the board, pro-growth reform so many economists and investors in Brazil have been crying out for for years.

But how much should they realistically expect of a Marina government? Continue reading »

Another week and yet another contraction in the consensus for GDP growth in Brazil this year. The central bank’s latest weekly survey of market economists has notched up its 14th consecutive week of falling forecasts and now predicts growth of just 0.52 per cent this year – which may even sound optimistic to some after last week’s figures showing the economy was in recession during the first half. Continue reading »

Brazil’s economy is, by the standard definition, in recession. Its GDP contracted 0.6 per cent in the second quarter from the first, while the first quarter figure was revised to a contraction of 0.2 per cent form the previously reported 0.2 per cent growth.

The year on year figures were even worse: a 0.9 per cent contraction compared with the second quarter of 2013. Still, as Joe Leahy reported for fast FT, employment seems to holding up so the performance of the economy may not completely derail President Dilma Rousseff’s chances of re-election in October. Continue reading »

It has been a shocking day in the progress of the crisis in Ukraine. As evidence mounts of yet more direct and duplicitous Russian military activity on Ukrainian soil, Russian assets have taken a hammering. The rouble fell 1.5 per cent against the dollar even after paring earlier losses and the RTS index of Russian stocks was down 3.3 per cent on the day, also after staging a recovery.

President Vladimir Putin denies Russia is involved in Ukraine at all, even as the Russian people hail him as a conquering hero with popularity ratings to match. But the chances that his adventure will be to their benefit are looking increasingly slim. As Neil Shearing of Capital Economics argued in a note on Thursday, “Russia is likely to be the major loser from any further escalation in the conflict.” Continue reading »

A report to be released by the Institute of International Finance on Wednesday will make sobering reading for EM investors: estimated portfolio flows to EM assets fell sharply in August to just $9bn, after a monthly average of $38bn between May and July.

August is always a slow month but this year it has been notably sluggish. EM bond issuance, for example, was just $22bn this month from a monthly average of $62bn over the past year and $44bn in August 2013, the IIF said. Continue reading »

Eduardo Campos, the Brazilian presidential candidate killed in an air crash on Wednesday, paid a visit to the FT in London at the end of last year. He met the editor and a dozen other journalists and left an impression of a man who had a clear view of the challenges facing Brazil and of the means to tackle them. In that respect, he was a rarity among Brazilian politicians. He will be sorely missed. Continue reading »

The weekly survey of market economists by Brazil’s central bank is becoming the economic equivalent of a limbo dance: each time around, just that little bit lower. This week’s edition has GDP growth in 2014 coming it at just 0.81 per cent, making 11 consecutive weeks of contraction. The outlook for 2015, which had been unchanged for five weeks at 1.5 per cent, has also come down, to 1.2 per cent.

Voters, though, don’t seem to be bothered. Continue reading »

How much lower can it go? The consensus on Brazil’s economic growth this year has been revised downwards for nine successive weeks, according to the central bank’s latest survey of market economists, and now stands at a meagre 0.9 per cent.

The consensus on growth next year is not much better, at 1.5 per cent. As our chart shows, estimates of growth this year (the black line) and next have been in decline for the past 12 months. (Longer, in fact. When the bank first asked economists about growth in 2014, they expected it to come in at 3.8 per cent.) Continue reading »