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from MacroScope:

Brazil set to release long-overdue jobless rate just as election race heats up

Workers at a General Motors vehicle factory listen during a meeting to discuss their reactions to an announcement of plans to put some 1,000 workers on paid leave, in Sao Jose dos CamposBrazil's unemployment rate has been a mystery for months: a strike in the country's statistics agency, ironically enough, disrupted its main job market survey. The numbers will finally come out in a few hours, less than two weeks before a tight presidential election, and will help voters understand just how bad the recently-confirmed recession has been.

IBGE’s August unemployment report is important not only because it can tilt Brazil's election balance in favor of current President Dilma Rousseff or her opponent Marina Silva, but also because it will determine the starting point of the labor market for a much-anticipated adjustment in Brazil’s economic policy. Some kind of shift is expected after the October election regardless of who wins, to keep debt under control and avoid losing the investment grade in coming years.

Looking at market estimates, one can expect anything, apparently. The range of forecasts in a Reuters poll was about three times as wide as in previous months, going from 4.5 percent, near a record low, to 5.8 percent, which would be the highest for August in three years. Either the recession has spared the job market so far, in good news for re-election candidate Rousseff, or it is now a reality for thousands of workers across Latin America's largest economy.

The median forecast is 4.9 percent, exactly the same rate reported in April. But some signs suggest a small increase is the most likely scenario, which would reinforce the outlook of a gradual but steady deterioration of one of the world's strongest labor markets just a few years ago.

from Over-Gaffenated:

Brazil on the grill

The idea of increased political risk when it comes to the U.S. markets has been mined before, and it’s true that the uncertainty that surrounds debates such as the renewal of the Export-Import Bank’s charter and the growing expectation that Republicans, should they take power in November in the Senate, could force another confrontation over the debt ceiling. That said, political risk in the U.S. isn’t anything when compared with Brazil as the largest South American economy gears up for its presidential election, a contest between current president Dilma Rousseff and environmentalist Marina Silva, who until last month wasn’t even running (she was the vice presidential candidate for her party, whose original candidate was killed in a plane crash).

It’s an understatement to say the markets aren’t a fan of Rousseff, who hasn’t been able to bring the country out of its current economic rut – in fact, a chart of the Bovespa stock market makes it an easy one to pick out pivot points in the election race. In a two-week stretch following the death of Eduardo Campos, the Bovespa jumped more than 11 percent as investors started to see Silva as the candidate more likely to take out Rousseff (the other candidate, Aecio Neves, has seen his support slowly erode as Silva emerged as a popular choice).

from Breakingviews:

How Big Oil could grease invisible hand

By Stephanie Rogan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The U.S. energy problem is very much due to a breakdown of the free market, contends the new documentary, “Pump.” Married co-directors Josh Tickell and Rebecca Harrell Tickell show how Big Oil’s monopoly on transportation fuels hurts Americans more than they realize. If drivers had options when filling up their tanks, both country and consumers would benefit.

from Breakingviews:

Vivendi boosts shareholder credentials in GVT sale

By Fiona Maharg-Bravo and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own. 

Vincent Bolloré, Vivendi’s chairman, is doing right by his shareholders. The French media group says it has entered exclusive talks with Telefonica on the Spanish group’s 7.5 billion euro bid for its Brazilian business GVT. The French conglomerate spurned a lower bid from Telecom Italia. It might have squeezed a bit more from Telefonica, but has chosen the surest exit. That leaves rival bidder TI facing an uncertain future.

from Breakingviews:

Telefonica may have to inch higher for GVT

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

Telefonica is showing how much it wants to buy GVT. The Spanish telecoms group has given Vivendi a 24-hour deadline to accept a new 7.45 billion euro ($9.8 billion) offer for the French conglomerate’s Brazilian subsidiary. A competing bid from Telecom Italia is 450 million euros lower, has less cash and is more conditional. Still, Vivendi could yet wring more out of this auction.

from Breakingviews:

Tragedy may reshape Brazil economy, not just vote

By Martin Hutchinson and Richard Beales

The authors are Breakingviews columnists. All opinions expressed are their own. 

Add Marina Silva to the challenges facing Dilma Rousseff. Brazil’s president faces a new opposition candidate in October’s election after Eduardo Campos’ death in a plane crash, and Silva looks a far bigger threat. If she ousts Rousseff, which polls show is possible, Brazil could gain economically from less state meddling.

from Breakingviews:

Buffett and tax outrage both diversions in BK deal

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Warren Buffett’s name is giving Burger King’s deal to buy Tim Hortons, now worth some $11 billion, a public relations boost. But some commentators on Twitter are calling the Berkshire Hathaway boss a hypocrite and branding him unpatriotic for supporting a company moving from the United States tax jurisdiction to Canada. Both sentiments are diversions.

from Breakingviews:

Why can Burger King, but not Wendy’s, own Hortons?

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Why can Burger King, but not Wendy’s, own Tim Hortons? Burger King used to argue that it was exceptional for the flame-broiling of its burgers. With its $11 billion purchase of the Canadian doughnut-chain, its shareholders seem to believe it is special in some other ways.

from MacroScope:

Brazil’s economy: not as bad as it looked?

Brazil's President Rousseff looks on during a news conference to present the balance of the 2014 World Cup in Brasilia

Brazil's economy may have grown by 3 percent in 2012, three times as much as originally reported, according to an ongoing review of GDP data that could solve one of the biggest economic puzzles since the global financial crisis.

If accurate, estimates from local consultancy LCA would help explain why unemployment remained so low and consumer prices failed to ease when Latin America's economy looked so weak.

from Breakingviews:

Portugal Telecom pays the price for weak controls

By Fiona Maharg-Bravo and Christopher Swann

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The show will go on. Portugal Telecom and Brazil’s Oi are forging ahead with their planned merger after an Espirito Santo group company failed to repay a $1.1 billion loan to PT. The Portuguese telco is paying the price for its weak controls over its own cash management. Its shareholders will now hold a smaller stake in the group it planned to form with Brazil’s Oi.

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