Itaú BBA - New external bond issuances last week

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New external bond issuances last week

October 3, 2016

Two Brazilian companies offered bonds abroad last week

(full report attached)

BRL underperformed its peers

During a week of risk aversion followed by some relief, the outcome was on average positive to emerging market currencies. The Brazilian real closed the week at 3.26 reais per U.S. dollar, depreciating 0.6% and underperforming its peers (Charts 1, 2, 3 and 4).

Central bank maintained the pace of reverse swap auctions

The monetary authority maintained the amounts of reverse FX swap auctions at $250 million, placing offers on a daily basis. Another auction was announced to take place today. The central bank also offered FX credit line auctions of up to $4 billion on Friday. Currently, its short position in FX swap contracts stands at $33 billion (Charts 5 and 6).

Currency outflows in September

The currency flow is negative by $2.3 billion in September, after hefty outflows last week. There were $700 million trade outflows and $3.9 billion financial outflows (Charts 7 and 8).

Two new bond issuances abroad last week

Two Brazilian companies offered bonds abroad. A cement enterprise issued $500 million in bonds due in 2026, while an oil & gas company offered $750 million in bonds due in 2027 (Chart 9 and table).

Foreign flows to the stock market are negative

Foreign flows to the stock market are negative by $384 million in September, as $538 million outflows from the spot market outsized $154 million inflows to the futures market (Chart 10).

Non-residents turned short in dollar futures

Non-residents went from long to $2.6 billion short in dollar futures, while institutional investors reduced their short positions in this derivative instrument by $1.9 billion. Non-residents also increased their long positions in cupom cambial by $2.3 billion. Non-residents, banks and institutional investors hold positions of $13 billion, $36 billion and $ -3.9 billion, respectively (Charts 11, 12, 13 and 14).


 

 



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