Brazil’s soaring budget deficit is sparking a selloff in its two-week-old international bonds, pushing up the cost of insuring its debt by the most in the world and prompting Finance Minister Guido Mantega to explain that he doesn’t spend taxpayer money on caviar and shrimp meals.
Yields on Brazilian interest-rate futures extended their weekly drop to the biggest since 2008 as the government planned to reduce returns on savings accounts to facilitate deeper cuts in the benchmark Selic rate.
Mexico’s peso fell after a report showing U.S. companies added the fewest number of workers in seven months added to evidence that economic growth in the Latin American nation’s biggest trading partner is slowing.
Mexico’s peso dropped for a second straight day as a U.S. central banker said the Federal Reserve’s decision to maintain monetary stimulus was close and policy makers may curtail the program next month.
Argentina is attempting to persuade debt holders to accept a swap offer for the second time this year as the government seeks to regain access to international markets with $7 billion of foreign obligations due next year.
Mexico’s peso gained the most in two months as the Greek government’s deadline for the biggest sovereign restructuring in history passed with a majority of investors signaling their readiness to participate in the swap.