This is an interesting piece from Bloomberg this morning:
Botin Builds `Republic of Santander' in Lula's Brazil
Brazil's trade minister is a former executive at Banco Santander SA. So is the man who oversees the country's monetary policy. Spain's biggest bank spent 1.8 million reais ($948,000) to back President Luiz Inacio Lula da Silva's campaign in 2002.
Now Santander is bidding for ABN Amro Holding NV's Brazilian unit to double its size in Latin America's largest economy. The deal would make Santander the biggest non-state bank in Brazil, ahead of Banco Itau Holding Financeira SA.
``Brazil is fast becoming the Republic of Santander,'' said Paulo Pereira da Silva, a federal deputy and head of Forca Sindical, the country's second-biggest union grouping. ``The bank's influence is growing.''
Santander Chairman Emilio Botin built ties to Lula as other lenders pulled back on concern the former labor leader would default on Brazil's debt, said Mauro Guillen, who wrote a history of the bank. Five years later, Citigroup Inc. and HSBC Holdings Plc are vying for a bigger slice of the Brazilian market as declining interest rates increase demand for loans.
``If they succeed in buying ABN Amro, Santander will become a Brazilian powerhouse,'' said Guillen, a professor at the Wharton School in Philadelphia. ``It's a quantum leap.''
Santander, based in the northern Spanish town of the same name, is part of a group led by Royal Bank of Scotland Group Plc that has offered 72 billion euros ($100 billion) for Amsterdam- based ABN Amro. The Spanish bank would get ABN Amro's Brazilian unit, Banco Real and Italian lender Banca Antonveneta SpA. A Santander spokesman declined to comment on ties to Lula.
Banespa Purchase
Botin appeared with Lula at a ceremony today in Madrid, where he said he expected Brazil to receive an investment-grade credit rating within 18 months.
``You know that we believe in Brazil,'' Botin told Lula, reminding him how they first met in his campaign office before the 2002 elections.
Santander, which entered Brazil in 1982, made its biggest push in 2000, when it bought Banco do Estado de Sao Paulo SA, known as Banespa, for $4.8 billion. Botin paid more than three times the price offered by the next-highest bidder, Uniao de Bancos Brasileiros SA, or Unibanco.
The rising value of Brazilian banks shows Santander's investment was sound, said Francisco Luzon, the bank's Latin America chief. Shares of Unibanco, Brazil's sixth-biggest bank by assets and the closest in size to Banespa, have risen fourfold since 2000, giving it a market value of 50.7 billion reais.
Yet Banespa's profitability and efficiency lag behind those of Brazil's biggest non-state banks, said Luis Miguel Santacreu, an analyst at Austin Rating in Sao Paulo.
Still Struggling
Banespa's return on equity was 15.5 percent last year, compared with 20.5 percent at Banco Bradesco SA and 18.3 percent at Itau. It also has the worst customer-complaint ranking among Brazil's biggest banks, according to the central bank.
``Buying Banespa was like a snake devouring a cow -- it takes a long time to digest,'' Santacreu said.
The payoff will be worth it, says Andrea Williams, who helps manage $2.4 billion in European banking stocks, including Santander, at Royal London Asset Management.
Brazil's mortgage market may grow more than fivefold in the next seven years, reaching 10 percent of gross domestic product from 2 percent now, according to Luiz Antonio Franca, mortgage director at Itau. Brazil contributed 455 million euros to Santander's first-half earnings, or 10 percent of group profit.
Santander backed Lula before the October 2002 elections, giving 1.8 million reais to Lula's party, according to Brazil's electoral court. It also donated 1.4 million reais to Jose Serra of the Social Democracy Party. By comparison, Itau donated 3.12 million reais to Serra's party and 350,000 reais to Lula's Workers' Party.
`Critical Time'
In August of that year, Botin restricted access to Santander's research after a New York analyst recommended selling Brazilian assets as the country's bonds and currency plummeted on concern Lula would default on 1.05 trillion reais of public debt.
After Lula's victory, Botin paid a call on the new president and pledged to maintain $2 billion in trade lines at a time when international lending to Brazil had plunged 16 percent.
``Santander believed in Lula and Brazil at a critical time,'' said Alexandre Marinis, who runs Mosaico Economia Politica, a consulting firm in Sao Paulo.
In March, Miguel Jorge, Banespa's corporate affairs director, was named trade minister. Mario Gomes Toros, a former vice president for Santander in Brazil, was appointed monetary policy chief at the central bank a month later.
A spokesman for Lula didn't return calls seeking comment. Jorge declined to be interviewed, a spokesman for the Trade Ministry said. Toros's representative declined to comment.
Jorge and Botin
At Banespa, Jorge helped leaders of United Workers' Central, Brazil's biggest union grouping, devise a plan for deducting loan payments from payroll checks, slashing costs for union members, said Jose Paulo Nogueira, executive director of the ABC Metalworkers' Union.
In previous corporate posts at Volkswagen AG's factory in Sao Bernardo and Autolatina, a venture of VW and Ford Motor Co., Jorge mixed with union leaders allied to Lula, including Luiz Marinho, who is now social security minister, Nogueira said.
Botin and Jorge hugged at today's meeting between Lula and Spanish Prime Minister Jose Luis Rodriguez Zapatero.
``Is Jorge someone Lula trusts? Well, he made him a minister,'' Nogueira said. ``They've been very astute.''
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Monday, September 17, 2007
Wednesday, September 12, 2007
Brazil Q2 2007 GDP
Brazil's economy expanded at the fastest pace in three years in the second quarter as lower interest rates and a currency rally fueled higher consumer spending and business investment.
Gross domestic product, the broadest measure of a country's output of goods and services, jumped 5.4 percent from a year earlier after growing a revised 4.4 percent in the first quarter or put another way gross domestic product in the April-June period expanded a seasonally adjusted 0.8 percent from the first quarter.
The Brazilian economy's year-on-year expansion in the April-through-June period was the fastest since the economy grew 7.5 percent in the second quarter of 2004.
Brazil's currency gained on the news and the real gained 0.8 percent to 1.9090 per dollar at 4:08 p.m. New York time (13-09-07), the strongest since Aug. 9 when it traded at 1.90 reais per dollar. The real has gained almost 12 percent this year, the best performer among the six major Latin American currencies.
Brazil's central bank has cut the benchmark lending rate 18 straight times since September 2005 - from 19.75 percent to 11.25 percent, fueling consumer lending, business investment and industrial output. The real has appreciated 20 percent against the dollar in that period as export revenues for Brazil's commodity exports surged.
Consumer spending in Latin America's biggest economy rose 5.7 percent in the second quarter from the same period a year earlier, the 15th straight quarterly increase, the government said. Investment rose 14 percent compared with the second quarter of 2006, while industry rose 6.8 percent, services 4.8 percent and agriculture rose 0.2 percent.
The 12-month inflation rate has accelerated since March, when it reached 2.96 percent, its lowest level since February 1999. In August, the rate climbed to 4.18 percent.
Bank lending has increased every month since February 2004, helped by falling interest rates and the increase in paycheck- backed loans, created by Lula in September 2003, the central bank said Aug. 27.
The program allows workers to borrow at lower costs because repayments are deducted directly from their wages.
Vehicle sales in Brazil have risen more than 25 percent this year as lower borrowing costs, coupled with longer maturities for car loans, fueled demand. Automakers have stretched out maturities to as long as 84 months from 36 months last year, lowering the monthly payments for borrowers.
Gross domestic product, the broadest measure of a country's output of goods and services, jumped 5.4 percent from a year earlier after growing a revised 4.4 percent in the first quarter or put another way gross domestic product in the April-June period expanded a seasonally adjusted 0.8 percent from the first quarter.
The Brazilian economy's year-on-year expansion in the April-through-June period was the fastest since the economy grew 7.5 percent in the second quarter of 2004.
Brazil's currency gained on the news and the real gained 0.8 percent to 1.9090 per dollar at 4:08 p.m. New York time (13-09-07), the strongest since Aug. 9 when it traded at 1.90 reais per dollar. The real has gained almost 12 percent this year, the best performer among the six major Latin American currencies.
Brazil's central bank has cut the benchmark lending rate 18 straight times since September 2005 - from 19.75 percent to 11.25 percent, fueling consumer lending, business investment and industrial output. The real has appreciated 20 percent against the dollar in that period as export revenues for Brazil's commodity exports surged.
Consumer spending in Latin America's biggest economy rose 5.7 percent in the second quarter from the same period a year earlier, the 15th straight quarterly increase, the government said. Investment rose 14 percent compared with the second quarter of 2006, while industry rose 6.8 percent, services 4.8 percent and agriculture rose 0.2 percent.
The 12-month inflation rate has accelerated since March, when it reached 2.96 percent, its lowest level since February 1999. In August, the rate climbed to 4.18 percent.
Bank lending has increased every month since February 2004, helped by falling interest rates and the increase in paycheck- backed loans, created by Lula in September 2003, the central bank said Aug. 27.
The program allows workers to borrow at lower costs because repayments are deducted directly from their wages.
Vehicle sales in Brazil have risen more than 25 percent this year as lower borrowing costs, coupled with longer maturities for car loans, fueled demand. Automakers have stretched out maturities to as long as 84 months from 36 months last year, lowering the monthly payments for borrowers.
Monday, September 03, 2007
The Real and the Trade Surplus
From Bloomberg this morning:
Brazil's Real Gains After Trade Surplus Increased in August
By Adriana Brasileiro
Sept. 3 (Bloomberg) -- The real gained as a widening trade surplus in August boosted speculation that rising dollar flows will support the local currency.
The real rose 0.4 percent to 1.9540 reais per dollar at 3:36 p.m. New York time. The yield on Brazil's benchmark zero-coupon bonds due January 2008 fell 4 basis points, or 0.04 percentage point, to 11.19 percent, according to Banco UBS Pactual SA.
``The outlook is for inflows to stay strong this year, protecting the real from external shocks,'' said Reginaldo Galhardo, currency director of Treviso Corretora, a Sao Paulo brokerage.
Brazil's trade surplus widened to $3.54 billion in August from $3.35 billion the previous month, the Trade Ministry said in a report on its Web site. It exceeded the $3.1 billion median estimate in a Bloomberg survey of 18 economists.
Exports rose to a record $15.1 billion last month from $14.1 billion in July, while imports also increased to a record $11.6 billion from $10.8 billion in July, the ministry said.
Brazil's Real Gains After Trade Surplus Increased in August
By Adriana Brasileiro
Sept. 3 (Bloomberg) -- The real gained as a widening trade surplus in August boosted speculation that rising dollar flows will support the local currency.
The real rose 0.4 percent to 1.9540 reais per dollar at 3:36 p.m. New York time. The yield on Brazil's benchmark zero-coupon bonds due January 2008 fell 4 basis points, or 0.04 percentage point, to 11.19 percent, according to Banco UBS Pactual SA.
``The outlook is for inflows to stay strong this year, protecting the real from external shocks,'' said Reginaldo Galhardo, currency director of Treviso Corretora, a Sao Paulo brokerage.
Brazil's trade surplus widened to $3.54 billion in August from $3.35 billion the previous month, the Trade Ministry said in a report on its Web site. It exceeded the $3.1 billion median estimate in a Bloomberg survey of 18 economists.
Exports rose to a record $15.1 billion last month from $14.1 billion in July, while imports also increased to a record $11.6 billion from $10.8 billion in July, the ministry said.
Thursday, August 16, 2007
Brazil Treasury Purchases Jump to Record
From Bloomberg today:
Brazil Treasury Purchases Jump to Record
Brazil is purchasing more U.S. Treasury notes than ever as China, for three years the biggest buyer of American government debt, reduces its holdings.
Brazil's portfolio of Treasury securities increased $41.5 billion to a record $93.6 billion in the first half of 2007, Treasury data showed today. That left Brazil ranked fifth among international holders of U.S. debt in June, up from 10th at the end of 2006 and surpassing South Korea and Germany.
The unprecedented demand from Latin America's largest economy is offsetting a weaker appetite in China, which sold U.S. notes for a third month in June. Brazil will sop up more American debt in the short term as Banco Central do Brasil President Henrique Meirelles tries to restrain his country's currency amid a surge in investment, analysts said.
``I would expect the Brazilian central bank to continue intervening and to buy Treasuries,'' said Nuno Camara, an economist who covers Brazil for Dresdner Kleinwort in New York. ``Unlike some Asian central banks that are moving toward some diversification, Brazil can't really take on too much risk, so they put it in Treasuries.''
Brazil has almost doubled its foreign-exchange reserves so far this year to a record of almost $160 billion, from $85.8 billion at the end of 2006. The purchases aim to slow a 49 percent rally in the Brazilian real over the past three years, the biggest gain against the dollar of the 17 major currencies tracked by Bloomberg.
Brazil didn't buy dollars yesterday for the first time since July and refrained again today. The real traded at 2.0295 per dollar at 3 p.m. in New York time, compared with 1.9853 yesterday.
Matching Liabilities
Brazil, the biggest debtor among developing nations, needs to concentrate its reserves buildup on dollar-denominated bonds because most of the country's government and corporate foreign liabilities are in the U.S. currency, said Emilio Garofalo, a former director at the central bank who now runs the investment consulting company EBS Capital in Sao Paulo.
``Brazil's choice of currency for the reserves was always based on future obligations, and that's the way it should be,'' said Garofalo, who managed the reserves for six years. ``Most of Brazil's debt sales have been in dollars.''
Beatriz Dornelles, a spokeswoman for the Brazilian central bank, said the monetary authority doesn't comment on its reserves strategy.
Biggest After China
China, the biggest foreign holder of Treasuries after Japan, sold a net $14.7 billion of U.S. government debt from April through June, the first time the country has sold Treasuries in three straight months since November 2000.
China, with total foreign exchange reserves of about $1.3 trillion, is seeking the prospect of higher returns by shifting some money from the relative safety of U.S. government debt into stocks and corporate bonds: The country bought a record $2.94 billion of U.S. stocks and a net $4.78 billion of corporate bonds in June, the Treasury data showed.
China has more leeway to buy assets denominated in other currencies because its reserves exceed its debt, Garofalo said. For Brazil, buying a bigger proportion of assets in other currencies, betting on bigger gains, would be speculation that the central bank shouldn't engage in, he said.
Swelling Debt
Brazil's total debt owed to creditors abroad -- including liabilities of companies and government -- rose to $182 billion at the end of June, from $157 billion a year earlier. The government's share of foreign debt has risen to $71.2 billion from $64.8 billion over the same period.
While Brazil likely will remain a buyer of Treasuries for at least another year, the country's investments are significant enough ease investors' concern that China will continue selling U.S. debt, said Marc Chandler, the global head of currency strategy at Brown Brothers Harriman & Co. in New York.
Brazil's share of all U.S. Treasuries held abroad in June rose to 4.2 percent, from 1.7 percent a year earlier. By comparison, China and Japan accounted for 46 percent of international holdings in June, down from 50 percent a year earlier, according to Treasury figures.
Brad Setser also ran a version of this story:
Brazil Treasury Purchases Jump to Record
Brazil is purchasing more U.S. Treasury notes than ever as China, for three years the biggest buyer of American government debt, reduces its holdings.
Brazil's portfolio of Treasury securities increased $41.5 billion to a record $93.6 billion in the first half of 2007, Treasury data showed today. That left Brazil ranked fifth among international holders of U.S. debt in June, up from 10th at the end of 2006 and surpassing South Korea and Germany.
The unprecedented demand from Latin America's largest economy is offsetting a weaker appetite in China, which sold U.S. notes for a third month in June. Brazil will sop up more American debt in the short term as Banco Central do Brasil President Henrique Meirelles tries to restrain his country's currency amid a surge in investment, analysts said.
``I would expect the Brazilian central bank to continue intervening and to buy Treasuries,'' said Nuno Camara, an economist who covers Brazil for Dresdner Kleinwort in New York. ``Unlike some Asian central banks that are moving toward some diversification, Brazil can't really take on too much risk, so they put it in Treasuries.''
Brazil has almost doubled its foreign-exchange reserves so far this year to a record of almost $160 billion, from $85.8 billion at the end of 2006. The purchases aim to slow a 49 percent rally in the Brazilian real over the past three years, the biggest gain against the dollar of the 17 major currencies tracked by Bloomberg.
Brazil didn't buy dollars yesterday for the first time since July and refrained again today. The real traded at 2.0295 per dollar at 3 p.m. in New York time, compared with 1.9853 yesterday.
Matching Liabilities
Brazil, the biggest debtor among developing nations, needs to concentrate its reserves buildup on dollar-denominated bonds because most of the country's government and corporate foreign liabilities are in the U.S. currency, said Emilio Garofalo, a former director at the central bank who now runs the investment consulting company EBS Capital in Sao Paulo.
``Brazil's choice of currency for the reserves was always based on future obligations, and that's the way it should be,'' said Garofalo, who managed the reserves for six years. ``Most of Brazil's debt sales have been in dollars.''
Beatriz Dornelles, a spokeswoman for the Brazilian central bank, said the monetary authority doesn't comment on its reserves strategy.
Biggest After China
China, the biggest foreign holder of Treasuries after Japan, sold a net $14.7 billion of U.S. government debt from April through June, the first time the country has sold Treasuries in three straight months since November 2000.
China, with total foreign exchange reserves of about $1.3 trillion, is seeking the prospect of higher returns by shifting some money from the relative safety of U.S. government debt into stocks and corporate bonds: The country bought a record $2.94 billion of U.S. stocks and a net $4.78 billion of corporate bonds in June, the Treasury data showed.
China has more leeway to buy assets denominated in other currencies because its reserves exceed its debt, Garofalo said. For Brazil, buying a bigger proportion of assets in other currencies, betting on bigger gains, would be speculation that the central bank shouldn't engage in, he said.
Swelling Debt
Brazil's total debt owed to creditors abroad -- including liabilities of companies and government -- rose to $182 billion at the end of June, from $157 billion a year earlier. The government's share of foreign debt has risen to $71.2 billion from $64.8 billion over the same period.
While Brazil likely will remain a buyer of Treasuries for at least another year, the country's investments are significant enough ease investors' concern that China will continue selling U.S. debt, said Marc Chandler, the global head of currency strategy at Brown Brothers Harriman & Co. in New York.
Brazil's share of all U.S. Treasuries held abroad in June rose to 4.2 percent, from 1.7 percent a year earlier. By comparison, China and Japan accounted for 46 percent of international holdings in June, down from 50 percent a year earlier, according to Treasury figures.
Brad Setser also ran a version of this story:
Almost all Brazilian purchases of US debt show up in the US data. Brazil bought $13b in long-term debt in June ($12.2b of Treasuries) and added $1.1b to its short-term holdings, for $14.1b in net inflows. In q2, Brazil – almost certainly Brazil’s central bank – bought $24.6 b of US long-term debt, and increased its short-term holdings by $2.4b, for a net inflow of $27b.
The net inflow in q2 though was a slightly smaller share of Brazil’s $37.6b reserve increase than in q1. In q1, net inflows from Brazil totaled $22.5b, almost equal to the $23.7b increase in Brazil’s reserves.
Nonetheless, one of the most stunning facts in the TIC data is that Brazil’s central bank provided far more financing to the US Treasury in the first half of 2007 – it bought $41.9b of US Treasury bonds – than the IMF provided Brazil in 2002-03. The IMF’s total lending to Brazil was only a bit more than $30b at its peak. I am always amazed by that particular data point. It drives home just how much the world has changed.
Brazil Real Weakens Past 2-Per-Dollar for First Time Since May
From Bloomberg this morning:
Brazil Real Weakens Past 2-Per-Dollar for First Time Since May
Brazil's currency weakened past the 2.0-per-dollar level for the first time in three months as losses in global credit markets prompted investors to shun riskier emerging-market assets.
The real fell as much as 2.4 percent to 2.0325 reais to the dollar, the first time it breached 2.0 per dollar since May 15. It closed down 2.2 percent to 2.0295 per dollar, following a 2.2 percent slide yesterday. The central bank didn't buy dollars for a second day, after purchasing the U.S. currency in the spot market daily since July 2006.
``Volatility is at unimaginable levels now and nobody can clearly assess the damage caused by loses in credit markets,'' said Ronie Marcelo Germiniani, the proprietary trading manager at Banco Itau SA, Brazil's biggest non-government bank in terms of market value. ``Nobody is going to take significant positions in emerging markets under these circumstances.''
The real has weakened 7.8 percent this month, trimming its advance this year to 5 percent. Losses in the real deepened last week as central banks around the world started injecting cash into money markets last week to prevent losses related to the U.S. subprime rout from causing illiquidity.
The real also fell against the yen today as some investors pulled out of so-called carry trades in which they borrowed in yen and invested in Brazilian fixed-income assets. The real fell 2.7 percent to 57.2676 yen.
The central bank's purchases of dollars until recent days built up foreign reserves, which reached a record $160 billion in July.
As its foreign reserves increased, Brazil's holdings of Treasury securities increased $41.5 billion to a record $93.6 billion in the first half of 2007, Treasury data showed today. That left Brazil ranked fifth among international holders of U.S. debt in June, up from 10th at the end of 2006 and surpassing South Korea and Germany.
Dollar Purchases
Finance Minister Guido Mantega said yesterday the central bank deemed it unnecessary to buy dollars. ``The central bank isn't obliged to carry out dollar auctions every day,'' Mantega told reporters in Brasilia yesterday.
``There was some talk yesterday that the non-intervention was a sign the bank saw this crisis as really damaging, and was worried it may make things worse by buying dollars,'' Germiniani said. ``So the bank may act today just to show that their outlook is still for the real to appreciate because of strong investment flows.''
The real's recent declines will bolster profit margins at manufacturers, including textile and shoe makers, which have been squeezed in international export markets by the real's rally, said Pedro Bastos, chief executive officer for the Brazilian asset management unit of HSBC Holdings Plc.
``The weaker real gives those sectors a reason to celebrate now,'' Bastos said in an interview in Sao Paulo.
Retail Sales
A government report today showed Brazilian retail sales rose 11.8 percent in June from a year earlier. The increase in retail, supermarket and grocery store sales, as measured by units sold, was more than the 10.6 percent rise in May and higher than the median 11.3 percent rise forecast in a Bloomberg survey of 28 analysts. Retail sales increased a seasonally adjusted 0.4 percent in June from May and rose 8.2 percent in the 12 months through June.
The yield on Brazil's benchmark zero-coupon bonds due January 2008 rose 8 basis points, or 0.08 percentage point, to 11.27 percent, the biggest rise since the yield jumped 9 points to 11.14 percent on July 26, according to Banco UBS Pactual SA.
Brazil Real Weakens Past 2-Per-Dollar for First Time Since May
Brazil's currency weakened past the 2.0-per-dollar level for the first time in three months as losses in global credit markets prompted investors to shun riskier emerging-market assets.
The real fell as much as 2.4 percent to 2.0325 reais to the dollar, the first time it breached 2.0 per dollar since May 15. It closed down 2.2 percent to 2.0295 per dollar, following a 2.2 percent slide yesterday. The central bank didn't buy dollars for a second day, after purchasing the U.S. currency in the spot market daily since July 2006.
``Volatility is at unimaginable levels now and nobody can clearly assess the damage caused by loses in credit markets,'' said Ronie Marcelo Germiniani, the proprietary trading manager at Banco Itau SA, Brazil's biggest non-government bank in terms of market value. ``Nobody is going to take significant positions in emerging markets under these circumstances.''
The real has weakened 7.8 percent this month, trimming its advance this year to 5 percent. Losses in the real deepened last week as central banks around the world started injecting cash into money markets last week to prevent losses related to the U.S. subprime rout from causing illiquidity.
The real also fell against the yen today as some investors pulled out of so-called carry trades in which they borrowed in yen and invested in Brazilian fixed-income assets. The real fell 2.7 percent to 57.2676 yen.
The central bank's purchases of dollars until recent days built up foreign reserves, which reached a record $160 billion in July.
As its foreign reserves increased, Brazil's holdings of Treasury securities increased $41.5 billion to a record $93.6 billion in the first half of 2007, Treasury data showed today. That left Brazil ranked fifth among international holders of U.S. debt in June, up from 10th at the end of 2006 and surpassing South Korea and Germany.
Dollar Purchases
Finance Minister Guido Mantega said yesterday the central bank deemed it unnecessary to buy dollars. ``The central bank isn't obliged to carry out dollar auctions every day,'' Mantega told reporters in Brasilia yesterday.
``There was some talk yesterday that the non-intervention was a sign the bank saw this crisis as really damaging, and was worried it may make things worse by buying dollars,'' Germiniani said. ``So the bank may act today just to show that their outlook is still for the real to appreciate because of strong investment flows.''
The real's recent declines will bolster profit margins at manufacturers, including textile and shoe makers, which have been squeezed in international export markets by the real's rally, said Pedro Bastos, chief executive officer for the Brazilian asset management unit of HSBC Holdings Plc.
``The weaker real gives those sectors a reason to celebrate now,'' Bastos said in an interview in Sao Paulo.
Retail Sales
A government report today showed Brazilian retail sales rose 11.8 percent in June from a year earlier. The increase in retail, supermarket and grocery store sales, as measured by units sold, was more than the 10.6 percent rise in May and higher than the median 11.3 percent rise forecast in a Bloomberg survey of 28 analysts. Retail sales increased a seasonally adjusted 0.4 percent in June from May and rose 8.2 percent in the 12 months through June.
The yield on Brazil's benchmark zero-coupon bonds due January 2008 rose 8 basis points, or 0.08 percentage point, to 11.27 percent, the biggest rise since the yield jumped 9 points to 11.14 percent on July 26, according to Banco UBS Pactual SA.
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