Currency: Brazil’s central bank unexpectedly acted to halt the currency’s slider on Thursday, highlighting growing concern among officials that the global financial crisis is damaging Brazil’s economy and could cause a potentially destructive spurt in inflation. Brazil’s currency tumbled as much as 4 percent against thedollar today before the central bank announced an auction ofcurrency swaps that is equivalent to selling dollars in thefutures market.
Equities: Brazilian blue-chip shares plummeted at the start of trading Thursday, joining in a global sell-off as nervous investors bailed out of emerging-market assets amid growing concerns about the health of the world economy.The Brazilian ETF (EWZ) is down about 7% as of now. The global turmoil has also raised fears that exchange operator BM&F; Bovespa could enact its circuit breaker during Thursday’s session. Trading would be halted for 30 minutes if stocks drop 10% from the previous day’s close. After the delay, trading could be halted a second time, this time for an hour, if stocks drop 15% from the previous day’s close.
Jobs & “Future Stagflation”: Brazil’s local economy is also starting to feel the pinch from the international troubles, with the country’s unemployment rate stable at 6.0% in August. While the unemployment rate remained at historic lows, an official said that hiring was light during the month because businesses don’t feel confident enough about the domestic and global economy to ramp up employment. Salaries, however, continue to rise because the tight labor market is forcing companies to pay more for the workers they do hire, stoking concerns about inflation that is currently running above the government’s target range.
Bonds & Debt: here is the consequence of the recent real devaluation: brazilian companies that borrowed in dollars will hurt… badly. It will affect their bottom line. Here is a list of the biggest brazilian debtors in dollars: