The EU is planning to hold talks with Latin American countries to dissuade them of becoming the replacement for Europe’s banned agricultural exports to Russia.
EU officials have stated goals of "seeking...a united international front on Ukraine" and to talk to countries that would potentially replace EU exports "to indicate that we would expect them not to profit unfairly from the current situation."
Russia has already been courting Latin America for alternative supplies. Brazil has authorized about 90 new meat plants to immediately start exporting chicken, beef and pork to Russia, while Chile is expected to be the replacement for Russia’s embargo on European fish.
Morgan Stanley says China's GDP growth could decelerate to a 5% handle in 2014 if the proper policy response isn't crafted to deal with banking sector deleveraging, a prediction which pairs nicely with Capital Economics' discussion of who loses from a Chinese "rebalancing." Commodity producing emerging markets in Latin America, the Middle East, and Africa are flagged and Barron'shas a list of ETFs which may or may not have priced in a China slowdown: EWZ, EPU, ECH, EWT, EWM, and, more generally, EEM.
Markets make opinons, they say, and Brazil's (EWZ) poor performance has managers pulling funds and talking about long-term troubles for the next great country. Money is instead chasing performance in Mexico (EWW), Peru (EPU), and Chile (ECH). A 10% move up in the Bovespa and it's our guess the prospects for Brazil among the adviser crowd will have improved.
More details on iShares' ETF fee hikes: Going to 0.61% from 0.59% (a 3.4% hike) are its Chile Investable Market Fund (ECH), China Small Cap Fund (ECNS), Indonesia Investable Market Fund (EIDO), Israel Capped Investable Market Fund (EIS), Philippines Investable Market Fund (EPHE) , Poland Investable Market Fund (EPOL), All Peru Capped Fund (EPU), Taiwan Fund (EWT), South Korea Fund (EWY), Brazil Fund (EWZ), Brazil Small Cap Fund (EWZS), South Africa Fund (EZA), Thailand Investable Market Fund (THD) and Turkey Investable Market Fund (TUR).
China may have the world's largest online population, but online retailers should focus on Chile first, according to A.T. Kearney, a consulting firm that advises retailers on overseas expansion. For every 10 people online in Chile, seven will buy something online, with the average Chilean household spending $158/year online vs. China's $17.
More on the fund manager survey: Money flowing out of Brazil is moving elsewhere in Latin America as fund managers are overweight Chile, Mexico, and Colombia. Also popular are Taiwan and India. Countries underweight: China, Thailand, Russia South Korea, and Turkey.
Chile's central bank holds its benchmark interest rate at 5%, in line with expectations. Analysts had been expecting no change due to increasing inflation pressures in the region. In February, the inflation rate hit 4.4% on a 12-month basis, the central bank's inflation target is nearer to 3%, plus or minus one percentage point.
Chilean President Sebastian Pinera says Chile will be the first developed country in Latin America, and will achieve the goal by 2020. It's a tall order, which would require growing at least 6% annually and creating 1M new jobs in a labor force of 7.5M people.
As the Mercosur summit opens in Montevideo, higher tariffs on a slew of products look to be on the way as South America contends with a flood of cheap Asian imports. Argentina and Brazil have already agreed to a considerable boost in the average 14% rate, with just some back-room haggling left to bring other countries on board.
Chilean central bank chief Jose De Gregorio suggests a change in policy is on the way saying, "we may need a bigger monetary push than at present," in response to events in Europe (and, no doubt the slowdown in China). On the fence for months as other emerging economies have cut, Chile could lower rates as early as December. ECH -1.3%.
Eurozone fallout reaches Chile, where industrial output unexpectedly declined 0.8% in October against an expected increase of 4%. As open of a trade economy as you will find, Chile is especially vulnerable to overseas shocks. Of course no discussion of Chile can go by without mentioning copper and thus mentioning China, so maybe the blame doesn't all go to Europe. ECH -30% YTD.
Latin American markets fell in line with Wall Street and are poised to post steep losses for the quarter. Concern over trade with China and continued meager consumer spending are today's main drags. Q3 Results: Brazil -16%, Mexico - 9.5%, Chile -19%, Argentina -26%.
A surprise rate cut from the Bank of Israel - which noted the global economic slowdown - may auger more easing moves from emerging markets. Brazil and Turkey have also recently surprised with cuts, and other recently tight countries like Chile and China may be next.
Canadian stocks decouple from the U.S., rising 1% on the strength of commodity prices and less direct exposure to the plight of European banks. Other major indices in the Americas: Mexico +0.1%, Argentina -0.9%, Brazil +1%, Chile +2.4%
Brazil's director of monetary policy says the central bank will maintain its policy of keeping dollar reserves, and will "diversify at the margin." The rout of the U.S. stock market is contagious across the Americas: Brazil -9%, Argentina -8.3%, Chile -7.1%, Mexico -5.1%, Canada -4%.
The iShares MSCI Chile Capped Investable Market Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Chile IMI 25/50 Index (the “ Underlying Index”).
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