Will 2025 be The Year of LATAM Markets?

Posted on February 9, 2024February 9, 2024 by Ignacio Teson

As economic growth stagnates and social conflicts increase in the developed world, emerging market economies are presenting an attractive alternative for investors. In fact, developed economies are projected to experience a mere 1.4% average growth in 2024, in stark contrast to the anticipated 4% average growth for emerging markets.

Latin American economies are expected to grow more than developed markets this year on average.

With economic growth slowing in the developed world and concerns mounting over a larger conflict due to political instability in Europe, investors are looking to emerging markets to find outsized returns.

Could this be LATAM’s year? The answer is neither yes nor no. What is clear is that there are structural reasons to bet on these economies in the long term.

Many emerging markets have experienced robust growth in recent years, in large part thanks to increased FDI inflows. For instance, since the end of the COVID-19 pandemic, emerging economies are the only ones that have been able to truly grow at sustainable rates, with an equal growth rate of 4% in 2022 and 2023. As the IMF has stated, “the slowdown is concentrated in advanced economies.”

An important advantage of emerging countries (and LATAM) is that they have higher growth ceilings, not only due to macroeconomic factors but also because of an environment more conducive to productivity.

For example, in Europe, the use of genetically modified crops or certain agrochemicals is discouraged, hindering further growth in the primary sector. The same applies to land use and CO2 emissions.

Moreover, in developed countries, the population median age is almost 50 years, which diminishes the ceiling of productivity and growth in macroeconomic terms. This implies greater challenges in scaling the production of goods and services.

Last but not least, commodity prices are another key reason why 2024 could be the year of LATAM markets.

If geopolitical conflicts were the key driver of commodity prices in 2022 and 2023, this year, potentially marked by initial rate cuts and a persistently complex geopolitical landscape, holds promise for primary products.

This year, in particular, the elections in the United States will bring volatility. What could be the result of a second term for Trump or Biden? Or the rise of a dark-horse candidate like Robert F. Kennedy JR? Nobody knows for sure, but regardless of the outcome it will be hugely challenging to manage a country in which half the population is diametrically opposed to the other half.

Slowly but steadily, LATAM can serve as a refuge for investors seeking to diversify their market exposure.

The US dollar fails to surpass the psychological level of 5 Brazilian reais.

Posted on February 9, 2024 by Ignacio Teson

The US dollar fails to surpass the psychological level of 5 Brazilian reais.

After touching the 5 reais per dollar mark during the week, the Brazilian real appreciates today, ending at 4.96 per US dollar.

The Brazilian real appreciates on Friday amid a general improvement in Latin American markets, rebounding from a volatile week. While it touched the key psychological level of 5 reais per dollar during the week, it currently stands at 4.96. There were no interventions made by the Central Bank, according to most analysts.

The dollar fails to breach this key barrier in a week with no major economic developments in Brazil. Political conflict with Paraguay regarding energy purchases from the Itaipu dam and higher-than-expected inflation figures were the week’s points of discussion.

Brazil, and Latin America in general, continue to be affected by the lackluster performance of other emerging countries like China, Brazil’s main trading partner, Argentina, and Paraguay.

Regarding other news, the annual variation rate of the IPC (Consumer Price Index) in Brazil in January 2024 was 3.8%, up 0.1% from the previous month.

Inflation closed at 4.62% in 2023, a figure within the Central Bank’s targets. In recent months, the Bank has gradually reduced interest rates to the current 11.25%. For this year, the inflation target is 3%.

“The magnitude of the [monthly] increase is out of line with expectations and can be alarming if you look at the composition without considering seasonality,” said Carla Argenta, chief economist at CM Capital.

The Central Bank has announced its intention to maintain the pace of half-percentage-point cuts at its next meeting, scheduled for mid-March. However, the institution remains cautious due to the volatility of the international situation and the slowdown in the Brazilian economy.

According to market forecasts, the Brazilian economy grew by around 3% in 2023. However, for 2024, a significant slowdown is expected, with GDP expansion projected to be around 1.5%.

The Brazilian market will be closed on Monday and Tuesday due to the carnival holiday in Brazil, which starts tomorrow.

Liquidity next week may also be affected by the Chinese Lunar New Year holiday, which started today and extends into the following week, with Chinese markets remaining closed.

Employment Grows in Canada, But Part-Time Jobs Dominate

Posted on February 9, 2024February 10, 2024 by Skerdian Meta

*Jobs jumped higher in Canada in January*

Jobs in Canada grew at a decent pace in January, while the unemployment rate fell 2 points, while expectations were for an increase. This sent the Canadian dollar higher while USD/CAD dipped to 1.34 lows, however it has bounced back up now as crude Oil reverses lower. Continue reading “Employment Grows in Canada, But Part-Time Jobs Dominate” →

A breather: Argentine markets recover after a disastrous week

Posted on February 9, 2024 by Ignacio Teson

A breather: Argentine markets recover after a disastrous week.

After accumulating an 11% decline until Thursday, Argentina rises by 4% today, closing the week with a decrease of approximately 7%.

After a bloody week where Argentina’s main index, the MERVAL, lost 11% of its value in dollars, it rebounds by about 4% today. The week ends with some Latin American countries showing positive returns, buoyed by the Chinese markets. However, in Argentina, the rejection of a key law proposed by President Javier Milei ended up impacting asset prices.

The declines were led by the banking sector, with Banco Supervielle and Banco Galicia at the forefront, experiencing drops of approximately 15% to 20% between Monday and Friday.

On Tuesday night, the Argentine Congress rejected the most significant bill presented so far by Javier Milei, the country’s president. The objective of the bill was to overhaul the country’s legal foundations.

It contained over 600 articles, of which 400 were subsequently eliminated after several negotiations. 200 remained, but the lower chamber decided to discard them altogether. To be precise, in order to avoid total defeat, La Libertad Avanza, the president’s party, decided to withdraw the bill while it was still under discussion.

The lack of political support became evident quickly. La Libertad Avanza only has 37 deputies out of 256 in the lower chamber, and 7 senators out of 72. Despite the president’s allies having gathered a majority to discuss the reform, the reality is that many of them were unsatisfied with the final wording.

“From minute zero, the ruling party behaved as if it had a broad majority in both chambers. This was compounded by a level of parliamentary inexperience that no one with gray hair in Congress remembers,” said one of the Legislators.

However, it’s important to note that until January, the Argentine market thrived as one of the best-performing in recent months.

Stocks and bond prices had incredible performances from November to January under President Milei’s promised reforms, driven by anticipated sweeping changes and apparent popular backing. ETFs like Global X MSCI Argentina (ARGT) increased by 40%, while individual stocks like YPF, GGAL, and CEPU surged by 90%, 110%, and 77% respectively, among others.

LATAM markets close the week with mixed results and a general slight positive note

Posted on February 9, 2024 by Ignacio Teson

A breather: After several negative sessions, Latin American markets are rebounding.

After successive days of negativity, Latin American markets are recovering to close the week with mixed returns.

LATAM markets close the week on a slight positive note

The week is closing with mixed results in the Latin American markets. Mexico and Brazil are ending the week with slight gains after experiencing an intraweek journey from higher to lower levels. The iShares MSCI Brazil, the primary ETF tracking the Brazilian market, closes the week with an increase of less than 1%. The same is true for the iShares MSCI Mexico.

On the other hand, the main ETF tracking the Colombian market, the Global X Colombia (GXG), ends the week completely flat, while Argentina concludes with a decline of around 5% for the week.

In what would be a weekly recap, LATAM had a challenging week, with China acting as a negative driver. However, the rebound in the Asian market on Tuesday also led to a significant rise in Latin American markets.

In the case of Mexico, there is some positive momentum due to the macroeconomic trend of nearshoring. Brazil continues to face significant internal judicial conflicts and external disputes with Paraguay regarding energy prices that Brazil purchases.

Colombia remains relatively stable without major developments, but thanks to the rise in oil prices, its main export, it managed to salvage a week that seemed more challenging than usual.

Argentina was the hot spot of the week. There, one of the main laws promoted by Javier Milei, president of Argentina, was rejected in Congress. The reform, which aimed to liberalize Argentina’s economy to a large extent, is a hard blow to governance and economic openness expectations.

The recovery of the Chinese market was an important driver this week. China is the main trading partner and destination of exports from many countries in the Latin American region. The CSI300, the main index of mainland China, has risen by over 4.5% this week, driving up assets related to Latin America and other emerging markets.

Monero Recovering after Delisting News

Posted on February 9, 2024 by Timothy St. John

The Monero crypto coin is recovering after news of its delisting.

Monero (XMR) is bouncing back after Binance announce did would be delisting the crypto coin.

Binance has yet to delist the cryptocurrency instrument Monero, but it will happen on February 20th. Once that policy goes into effect, it is likely that the XMR price will go into decline.

When news broke that the coin would be delisted, Monero’s price fell by 37%. The initial drop was quite steep, but it has started to recover since then. The recovery so far has only been a partial one.

Before Binance made its announcement, Monero has been consistently sitting above $160 (XMR/USD). Now, the price has dropped to $120.04. The price fell briefly to about $100 before recovery started.

For the last week, Monero has recovered a loss of 27.86%. It’s volume has dropped 16% in the last 24 hours, but it looks like it may be stabilizing.

Where Can Monero Go from Here?

Obviously, Binance is not the only platform Monero can be purchased from, but it is the largest cryptocurrency and altcoin trading platform. Leaving that marketplace will be a major blow to the coin and its value, most likely. The market has already responded with their sentiments on the matter by selling off XMR coins.

Binance will still allow XMR withdrawals until May 20^th, but not one will be able to purchase the can once it has been delisted. XMR prices could be affected by selloffs long after the delisting takes place, then, which means we will not be seeing the last of the impact by that February date.

Monero is rapidly becoming an in-demand privacy coin, which means that the buyer cannot be tracked or identified. Binance has taken issue with that type of coin and will periodically reassess coins on its platform to see if they still meet its criteria for trade. Monero no longer does, and it will be delisted over privacy concerns.

Monero will likely remain in demand, despite the drop in value. By existing as a high profile privacy token, it offers something that many high profile crypto coins do not.

The delisting might not be permanent. If Monero changes classification or if Binance reneges on its decision, XMR could come back onto the platform. Periodic reviews will allow Monero to get another chance, but odds are low that this will happen before the delisting and will affect the coins delisted status very soon.

Canadian Jobs Report Strengthens CAD Against USD

Posted on February 9, 2024 by Timothy St. John

The Canadian dollar gained some ground against the US dollar, moving from 0.7430 to 0.7445 after jobs report data.

The Canadian jobs report released Friday, trailing behind the US jobs report for earlier in the month. We have seen minor movement from the CAD/UD pairing as a result, but we may see even more in the coming days as more of the data is analyzed and numbers are crunched by investors. The US dollar was weak in some areas, which helped the CAD/USD pairing become more favorable throughout the week.

The big news is that the Canadian unemployment rate fell, moving from 5.8% to 5.7% for January. New jobs were added at much higher numbers than the expected estimate of 15,000. Instead, an impressive 37,000 positions were filled, showing a strengthening economy that may boost the value of the Canadian dollar as the year continues.

Even wages increased, with the Average Hourly Wages moving up 5.3% over the last year, making Canada more appealing for its citizens and for foreign nationals.

What This Means for the Canada Dollar

Hopes are high for the Canadian economy as it keeps moving way from post-pandemic recession to a place of strength. Workforce participation is decent in Canada, with a 65.3% participation rate through January 2024.That is down very slightly from the previous month, but the difference is considered negligible. The population of those aged 15 years and older is on the rise, which could mean greater participation in the next few years.

Employment gains across the country will help the country’s economy to improve, driving up GDP and other important factors that contribute to the value of the Canadian dollar.

Most gains are minimal, with different work sectors reporting increases of 1% or slightly more, but those will have a knockdown effect in time and contribute to a stronger overall economy by the end of the year. Because the gains are mostly minor across the board, the Canadian dollar should not move very much over the next few months. The change will be incremental, making for a slow burn investment.

Ethereum Will Spike To $4000 By The End Of June – Analysts Explains

Posted on February 9, 2024 by Sophia Cruz

As Bitcoin, the top cryptocurrency, surged past $46,000 with significant momentum, Ethereum, the largest alternative coin, approached the $2,500 mark. Analysts are generally optimistic about the price of ETH, as they anticipate the approval of spot Ethereum ETF applications in May, and option data also indicates positive prospects.

Based on Deribit’s data, Ethereum call options expiring in June are heavily focused on the $4,000 price point. They also provided charts for Ethereum call options, indicating that investors are anticipating ETH to reach $4,000.

The concentration on the $4,000 strike price indicates that market participants and investors have expectations that the Ethereum price will rise above $4,000 by the options expiration dates.

Continuing his evaluation of the possible ETF approval and its effect on ETH’s price, the Deribit executive mentioned that it’s uncertain whether derivative investors anticipate a price surge following the potential approval of the spot ETH ETF. It’s too early to determine the outcome of this matter.

This clustering could indicate agreement or speculation regarding Ethereum’s potential future market movements.”

Regarding the potential approval of the ETF and its effect on ETH’s price, the Deribit executive expressed uncertainty about whether derivative investors anticipate a price rise following the potential approval of the spot ETH ETF. It’s too soon to reach a conclusion on this matter.

“Option data in June is higher than in April, and the expectation is relatively higher. However, it is difficult to make a connection for now, especially with the Ethereum ETF approval news or the expected correlation with the BTC halving.

“Because the impact of these events on the Ethereum price remains unclear.”

Ethereum continues to trade at $2,512.73 ETH (3.21% higher) at the time of writing.

Bitcoin (BTC) Reaches $46,000: Prediction Claims BTC To Surge By 190% In The Next 3 Months

Posted on February 9, 2024February 9, 2024 by Sophia Cruz

Earlier today, Bitcoin shot up above $46,000, breaking through a tough barrier at $44,000. This barrier has been stopping the price from going up since spot Bitcoin ETFs were introduced in the United States about four weeks ago.

Following a period of volatility where Bitcoin’s price went down to $38,500, BTC is now making a notable recovery, surpassing the $46,000 mark. This resurgence comes from the decreased selling pressure from major players such as Grayscale and the recent launch of Bitcoin Spot ETF trading.

Dan McDermitt and Scott Melker, experts from The Chart Guys, are positive about Bitcoin’s recent stability They see it as a sign that the price might shoot up soon. However, McDermitt warns that this could lead to more trading and unpredictable price changes. He also mentioned that a 10% surge during a positive trend is rare, so investors need to be careful with their decisions. McDermitt advises waiting for a clear sign of a price increase before making big moves.

Despite Bitcoin not reaching its peak levels, McDermitt believes the market is ready to establish a new weekly low surpassing the previous low of $38,500. He emphasizes the importance of the upcoming days in determining whether there will be a significant increase in trading activity or if the market will stabilize.

McDermitt also discusses the 12-day exponential moving average (EMA) as an important signal for the market’s health. He says the market will stay stable as long as the bulls (buyers) keep defending this level. He also says it’s essential to watch trading volumes, especially with trends like Coinbase transactions and interest in exchange-traded funds (ETFs), which show that people are paying more attention to how much trading activity is happening.
At this time of writing, Bitcoin (BTC) is 6.20% higher at $47,567 in the last 24 hours.

Shibarium (SHIB) New Accounts Surges By 621% – Burn Rate Spikes By Over 190%

Posted on February 9, 2024February 9, 2024 by Sophia Cruz

There’s been a significant increase in activity on Shiba Inu’s layer-2 blockchain platform, Shibarium. Within just 24 hours, new account activity surged by an astonishing 621%. Data from Shibariumscan shows that new accounts jumped from 33 on February 6 to an impressive 205 on February 7. This raised the total number of accounts on Shiba Inu’s L2 to 63,341.

Overall, Shibarium has over 63,000 accounts on its Layer 2 platform. This rise in network activity aligns with a significant increase in the asset’s price. Currently, the price has surged by more than 3% in the last 24 hours, according to CoinMarket Cap.

Increases in network activity like this often indicate possible changes in the prices of related cryptocurrencies. The rise in new accounts on Shibarium came before a noticeable increase in the price of SHIB. After more than two weeks of quiet trading with little change, the SHIB token experienced a significant increase. This surge marks a significant shift from a long period of little movement, sparking excitement among SHIB supporters.

On the other hand, Shiba Inu (SHIB) has experienced a remarkable increase in its burn rate, rising by an impressive 191.69% in the past 24 hours. The most recent data from Shibburn shows that a staggering 7.65 million SHIB tokens have been burned during this time. This substantial rise in the burn rate suggests a considerable decrease in the token’s total supply, leading to speculation about potential price rises soon.

According to recent reports, a total of 410.7 trillion SHIB tokens have been permanently taken out of circulation. This means the current circulating supply of SHIB is roughly 581.36 trillion tokens. Burning SHIB tokens to decrease the supply is seen as a strategic move to increase its rarity and, therefore, its value in the long run.

The big question now is if Shibarium’s momentum will last and what it means for the future price of SHIB. As the market eagerly waits for more news, recent increases in network activity and price movements show that Shiba Inu continues to attract investors’ interest.