The FED & The U.S. Dollar

Author

Faro Capital
March 31, 2023

Good Morning,

U.S. stocks ended higher with investors focused on the Fed’s monetary policy. Amid banking worries and a future credit crunch, the talk on the street is what is the future steps of the Fed. The Fed hinted at future rate hikes to come with efforts to bring down inflation. U.S. jobless claims rose last week but still at historic lows. Canadian stocks closed higher with support coming from the tech & financial sectors. Investors will be glued to this Friday’s Canada’s GDP data that’s due to come out.

Brazilian stocks ended higher with the release of the long-awaited fiscal framework coming out. It proposes a target of zero primary deficit in 2024 and a surplus in 2025. This week Brazil and China reached a deal to trade using their own currencies, reducing the need for U.S. dollars. This will put pressure on the dollar, now the question is will other countries in the region follow Brazil’s lead?

Markets: Before the Open

Earnings

Top News Stories

Canada

  • Canada’s Infrastructure Bank is investing C$277M in a biofuels facility (BNN)

  • BNN Bloomberg reported on key points on Canada’s new budget (BNN)

  • Calgary based cannabis retailer SNDL is acquiring four Dutch Love stores for C$7.8M (BNN)

  • Canadian retailer Dollarama announced profits of C$261.3M in Q4 (BNN)

  • Constellation Software announced Q4 profits of $152M (BNN)

  • Quebec and the federal Canadian government announced a C$955M investment over five years for sustainable agriculture (MG)

U.S.

  • Vigin Orbit will cease operations after failing to secure funding for operations (CNBC)

  • Nikola to raise $100M through a secondary stock offering (CNBC)

  • Lucid to cut around 1,300 jobs due to low sales of its EV car (CNBC)

  • The president of Merrill Lynch wealth management, Andy Sieg, to join Citibank as head of global wealth (CNBC)

  • Air Force cuts Lockheed Martin’s Hypersonic weapon program for rival Raytheon (BBG)

  • Unemployment filings rose last week but are still at historical lows (WSJ)

  • SBF denies new charges against him (WSJ)

Argentina

  • A report by INDEC showed poverty affected 39.2% of the population in the second half of 2022 (BAT)

  • S&P cut Argentina’s credit rating to CCC-, just three levels above default (BAT)

Brazil

  • Brazil posts an $8 billion deficit in February '23 (RT)

  • Brazil has unveiled new long awaited budget rules (RT)

  • Brazil’s public debt rose to $1.13T in February (RIO)

  • Brazilian Ministry of Agriculture suspends poultry exhibitions due to bird flu outbreak (RIO)

Colombia

  • Colombia’s central bank raised rates to 13% (RT)

  • Ecopetrol shareholders vote to distribute $33.2B pesos in dividends at their annual meeting (PORT)

  • Colombian airline Ultra Air will cease operations even with additional capital (AT)

  • Largest foreign direct investors in Colombia were Spain, U.S., and Panamá (ELT)

  • Corficolombiana reported $63B pesos in social investments impacting 450K Colombians (ELT)

Costa Rica

  • Costa Rica issued $1.5B worth of bonds due in 2034, the first time in 3 years, it was most 4.5 times oversubscribed (CG)

Chile

  • Primus Capital to raise $80M through bonds with Prival Bank underwriting the issue (LF)

Ecuador

  • Ecuador’s top court decides that impeachment hearings can continue (RT)

Peru

  • Gloria Foods takes over Soprole, after initial talks in 2021 (ELC)

  • Credicorp takes over Joinnus (ELC)

Mexico

  • Bank of Mexico hiked rates to 11.25% (RT)

  • PEMEX to invest $13.6B in pit field located in Campeche (MB)

  • Nuevo Leon’s energy demand to rise 1.2GW, due to nearshoring (MB)

  • Mexico’s trade deficit hit $1.8B in February (MB)

Venezuela

  • Valero is looking for America’s permission to import Venezuelan Oil (RT)

Insights

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DISCLAIMER: The writing above is not financial advice or solicitation to buy/trade any financial product/security. This newsletter is for educational purposes only. Any action/decision made by any reader is done by their own accord. Financial markets are full of risk so please be careful.