NEW YORK, April 19 (Reuters) – Bondholders fighting
Argentina for full repayment on defaulted debt made their final
plea late on Friday to a U.S. appeals court asking them to
affirm prior rulings ordering a $1.33 billion payment, saying
Buenos Aires continues to defy U.S. law.
The 2nd U.S. Circuit Court of Appeals in New York directed
these bondholders, led by NML Capital Ltd, a unit of billionaire
hedge fund manager Paul Singer’s Elliott Management Corp, and
Aurelius Capital Management, to submit a response by April 22 to
a new Argentine payment proposal.
NEW YORK, April 19 (Reuters) – A steady flow of cash into
emerging markets could become a flood as the Bank of Japan’s
huge stimulus program may prompt the nation’s investors to chase
higher returns – but for some developing countries that could be
too much of a good thing.
The fear is that a big fresh influx of foreign money could
overheat those markets, triggering higher prices and pushing
currencies higher, which would make a country’s exports more
expensive while pulling in cheaper imports that could hit
domestic producers. The money may also disappear as fast as it
arrived if returns became better elsewhere.
Global investors were loading up on Mexican, Russian and
other bonds even before the Bank of Japan (BOJ) announced on
April 4 its attempt to end decades of stagnation by pumping $1.4
trillion into the economy. Global inflows into local currency
emerging market debt funds in the first quarter were the biggest
in two years, Thomson Reuters’ Lipper service data shows.
A 15 percent drop in the yen so far in 2013, and a 28
percent gain in Japanese stocks, has prompted Japanese investors
to bring some cash back home in recent months. But analysts
expect Japan’s appetite for foreign assets to increase again
given low yields on Japanese deposits and bonds.
“A lot of money is still likely to leave Japan,” said
Citigroup currency strategist Steven Englander. “Some of it has
to go into emerging markets.”
Bank of America Merrill Lynch estimates that Japanese retail
investors, collectively referred to as “Mrs. Watanabe,” the
mythical manager of household savings, hold some $16.8 trillion
in assets, with a bit more than half in deposits and cash.
Emerging markets, with their strong growth rates and high
interest rates, “may attract a significant portion of these
savings,” strategists at Bank of America told clients in a
Concerns that money created by central banks, such as the
U.S. Federal Reserve and the BOJ, will pour into developing
markets was high on the agenda of the finance leaders of the G20
group of advanced and emerging economies this week in
In a communique after the meeting, G20 leaders said they
would be “mindful” of side effects of extended monetary
“Monetary policy should be directed toward domestic price
stability and continuing to support economic recovery, according
to the respective mandates of central banks,” the statement
HUNTING FOR YIELD
In the past five years, emerging economies have accounted
for almost three-quarters of global growth, the IMF says.
That’s fueled a big move into local currency funds, which
pulled in more than $16.7 billion in the first quarter of 2013,
the best this relatively young sector has seen in more than two
years, according to Lipper. Hard currency funds attracted cash
in the first three months of the year, albeit at half the pace
seen in the fourth quarter.
The inflows come despite disappointing returns so far in
2013. Local currency debt funds lost 1.05 percent while hard
currency debt funds dropped 2.2 percent in the first quarter.
NEW YORK (Reuters) – A steady flow of cash into emerging markets could become a flood as the Bank of Japan’s huge stimulus program may prompt the nation’s investors to chase higher returns – but for some developing countries that could be too much of a good thing.
The fear is that a big fresh influx of foreign money could overheat those markets, triggering higher prices and pushing currencies higher, which would make a country’s exports more expensive while pulling in cheaper imports that could hit domestic producers. The money may also disappear as fast as it arrived if returns became better elsewhere.
NEW YORK (Reuters) – The U.S. dollar and euro rallied 1.5 percent versus the yen on Friday after Japan said the Group of 20 countries did not oppose its aggressive monetary easing aimed at beating deflation rather than at weakening its currency.
Traders said hedge funds resumed buying the dollar against the yen, leaving the pair poised to test strong resistance and option barriers at the 100 yen level in the coming days. The dollar hit a four-year high of 99.94 yen last week.
April 19 (Reuters) – Standard & Poor’s on Friday revised
down its sovereign credit outlook on Venezuela to negative from
stable, citing the close presidential election, questions about
the vote’s legitimacy and the increase in political uncertainty.
The current B-plus rating of the OPEC-member nation of 29
million people was affirmed, S&P said in a statement.
NEW YORK (Reuters) – The euro edged higher against the dollar on Thursday, rebounding from its biggest daily drop in 10 months in the previous session, as more signals flashed a weakening of the U.S. economic recovery.
The yen slipped against the dollar and euro as investors believed Japan was unlikely to face much criticism of its aggressive monetary easing at a meeting of the Group of 20 countries beginning on Thursday in Washington.