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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 Joe Leahy reported in Monday’s FT, the death knell is sounding for Brazil’s economic strategy. Within hours of publication, Brazil’s central bank supplied a few more nails for that strategy’s coffin in the shape of its weekly survey of about 100 market economists. The news: growth is trending down and inflation is trending up – dangerously so. Continue reading »

Is this a turning of the tide? After 22 straight weeks of outflows, dedicated EM equity funds recorded inflows of $2.44bn in the week to April 2, equal to 0.3 per cent of assets under management in the sample followed by EPFR, the Boston-based fund flow watcher.

EM bond funds, too, had inflows in the week, of $1.06bn, or 0.5 per cent of AUM, only the second week of inflows out of the past 17.

So does the past week mark a change in sentiment for EM? Not so fast. Continue reading »

Well, that didn’t last long.

Source: dolartoday.com

Venezuela launched its long-awaited Sicad 2 dollar market on Monday, in what many hoped would be a step towards normalisation of the country’s dysfunctional foreign exchange market. Continue reading »

Standard & Poor’s, the international rating agency, cut Brazil to one notch above junk on Monday evening, adding to a chorus of complaints from many in the investment community, not to mention ordinary Brazilians, that the country’s once-promising growth story is currently shot to pieces.

No prizes for guessing how that went down in Brasília. As if to remove any doubt, the finance ministry put out a strongly-worded statement, rubbishing S&P’s decision point by point. But the ministry hasn’t done itself any favours. Continue reading »

What price an invasion? Rising alarm at the stand-off between Russia and the west over Ukraine is feeding straight through to Russian assets including the rouble, equities, bonds and CDS spreads.

So it was little surprise that Russia’s central bank decided on Friday that its “temporary” sharp hike in interest rates this month was not so temporary after all. Continue reading »

Imagine you are a young business in a former Soviet Republic, about to enter a greenfield investment with new Russian partners in a project in Russia for which you are providing the $1bn investment capital. Given the recent events in Ukraine, would you be feeling more or less nervous than you were a few months ago?

“We know that we are vulnerable,” says Nasib Piriyev, chief executive of the Azerbaijan Methanol Company. “Moscow has inherited the policies of the Soviet Union and it works with the same instruments.” Continue reading »

The Ukraine crisis has entered its “wait and see” phase. Does this mark the beginning of a peaceful resolution or is it the calm before the storm? Have investors embarked on a relief rally, or is the dead cat bouncing?

There were opinions to match all tastes from market analysts on Wednesday. Here is a beyondbrics summary of those views, from “Crisis? What crisis?” to “Cold War 2.0″. Continue reading »

There has been a relief rally in Ukrainian assets with the uneventful passing of Tuesday morning’s rumoured deadline for Ukrainian troops in Crimea to surrender to the peninsula’s Russian occupiers. Vladimir Putin appeared to pull further back from armed conflict in a mid-day press conference, so the rally may have more legs.

But yields are still at the brink.

Source: Thomson Reuters

 Continue reading »

Just as things were starting to look up for many economies in central and eastern Europe, along comes the crisis in Ukraine. How severe will the impact be?

The answer, of course, depends on how the crisis develops. Says Simon Quijano-Evans of Commerzbank: “If we’re talking about the secession of any region of Ukraine, then we have to go on to the next step, which is about relations breaking down not between Russia and CEE but between Russia and the EU. The only way the EU and the US can react is through economic and financial sanctions.” Continue reading »

Source: Thomson Reuters

Ukraine’s central bank is doing what it can to protect the hryvnia. Continue reading »

Some good news at last for the beleaguered Brazilian government: GDP growth in 2014 was 2.3 per cent, including 0.7 per cent in the fourth quarter, beating surveys by Reuters and Bloomberg which both had a consensus for 0.3 per cent in Q4.

Among those heaving sighs of relief will be the central bank, whose widely-followed GDP indicator, the IBC-Br, had suggested a marginal contraction in activity in the fourth quarter, which would have put Brazil into a technical recession (two consecutive quarters of contraction). Continue reading »

Investors in Ukrainian bonds have heaved a collective sigh of relief over the past few days – or, if not that, they have at least moved further away from the threat of default, if the recent retraction in bond yields and CDS spreads is any guide. But even in the darkest days of last week when Ukrainian yields soared to panic levels, investors could have taken one grain of comfort. Things, after all, could have been worse: they could have invested in Venezuela. Continue reading »

Ukrainian bonds are rallying strongly on Monday as investors digest the weekend’s dramatic events. Short term bonds issued by the sovereign and by Naftogas, the state gas company, have recovered from their recent panic levels.

But is there so much for investors to cheer about? Continue reading »

We did this a couple of days ago but here it is again: the $1.6bn bond of Naftogaz, Ukraine’s state gas company, due on September 30. If 30 per cent in less than eight months wasn’t apocalyptic enough, its yield has now gone to 34 per cent and counting. Does this look like some kind of endgame?

Source: Thomson Reuters

 Continue reading »

This is the yield on the $1.6bn bond of Naftogaz, Ukraine’s state gas company, due on September 30 this year. Thirty per cent for less than eight months, anyone?

Source: Thomson Reuters

 Continue reading »