Wednesday, May 28, 2008

Lot's of Action out of Latin America

There was lots of movement in Latin America today. In Argentina the farmers were asked by local leaders to show patience in dealing with the Government.

``There is a very strong desire across the country to express anger at the government's decision to stand us up,'' Buzzi said. ``We're asking the people to be patient and tolerant.''

This shows that everyone is aware of what is at stake if talks totally crumble.


In Brazil the finance minister Guido Mantega said that

Brazil may cut more import duties to help fight inflation and stem rising food costs.

``If we see more products experiencing price increases, we can lower tariffs,'' Mantega told reporters today in Rio de Janeiro. Brazil has more ways to fight inflation than just raising interest rates, he said.

This "Help" sent Brazilian rates off the highs of the day. Still closing higher but possible signalling a near term top. With 2-3 year sector rates at 14.5% and the latest projection for short term rates to peak at 14.5%, lending in the 2-3 year sector against paying a shorter run seems like it has some potential. I cut down on my widening differential play against dollars and will look to exit totally when I can.

In Mexico tere was talk by President Felipe Calderon of "opening up the energy and telecommunications industries to more investment as well as improvements to education and labor laws may boost economic growth to as much as 6 percent a year. "

This could really help with economic growth in Mexico. The news was taken favorable with the currency stregthening marginally against the dollar.

In Chile the dollar strengthened alot over the last two days. Why, I am not exactly sure. The CB has been in daily buying it's usual 50 mio usd. This it totally expected and I do not think is the reason. When I know more I will pass along.

Take a look at Crude, LOWER Today. This will be good for Asia and bad for Latam overall. I sold Usd/Krw at 1043.50 in the 1mth. I expect the market to open lower in Asia time tonight.

Good Luck and Good Currency Trading.

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