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Mexico cuts 2019 GDP forecast; Brazil looks to ease further reserve requirements

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Mexico cuts 2019 GDP forecast; Brazil looks to ease further reserve requirements

* The Mexican central bank lowered its 2019 GDP growth forecast to between 0.8% and 1.8%, from a previous range of between 1.1% and 2.1%, Reuters reported. The country's results from the first quarter showed a 0.2% contraction.

* The Brazilian central bank will reduce the level of mandatory deposits of the institution in the long term, at a higher rate than in recent years, Valor Econômico reported, citing the president of the central bank, Roberto Campos Neto. The volume of these deposits has dropped to 420 million reais from 500 billion reais. "There has been a timid reduction, and we believe there is room to do more," Campos Neto said.

MEXICO AND CENTRAL AMERICA

* Fitch Ratings lowered the long-term national ratings of Guatemala-based Financiera de Occidente SA to B-(gtm) from BB+(gtm), and also on Tarjetas de Crédito de Occidente SA to B(gtm) from BB+(gtm). The outlooks on both companies were also revised to negative from stable. The downgrades on both companies' ratings reflect deteriorations in their loan portfolios.

* Rafael Olviera Amezcua, allegedly responsible for the fraud of the Mexican popular finance company Ficrea, was arrested in the U.S. on May 29, El Economista reported. The reason for the arrest, which is yet to be determined, could be the alleged laundering of 4 billion Mexican pesos or his irregular immigration status in the U.S.

* A magnitude 6.6 earthquake hit El Salvador early on May 30, Reuters reported, citing the U.S. Geological Survey. The quake was also felt in Guatemala. No significant damage was immediately reported.

BRAZIL

* Brazil's central bank said the amount of outstanding loans in the country was at 3.3 trillion reais in April, Reuters reported. Loan defaults were 3.8% in April, slightly below the 3.9% default rate in March.

* Brazil posted a primary budget surplus of 6.54 billion reais for the month of April, lower than a Reuters forecast of 8.35 billion reais. For the first quarter, Brazil's accumulated deficit before interest payments totaled 2.75 billion reais.

* The Brazilian association of securities brokers and distributors criticized the advertising campaign of Banco Santander (Brasil) SA-owned digital investment platform Pi DTVM for showing a negative image of the intermediary and market institutions, Valor Econômico reported. In a statement, Pi said the advertisements were meant to be "simple, transparent, and without conflict of interest."

* Roberto Sallouti, CEO of Banco BTG Pactual SA, said the secondary offer of shares announced on May 29 responds to investors' demand for more liquidity and a greater weight in the bank's corporate governance, Valor Econômico reported. Meanwhile, Amos Genish, a senior partner at the company, said BTG will aim to be the sixth-biggest retail bank in Brazil, with three million customers.

* Banco Nacional de Desenvolvimento Econômico e Social is studying the possibility of opening up its loan portfolio to finance the construction of infrastructure projects, a sector where the capital markets continue to play a smaller role due to the risks involved, Valor Econômico reported.

ANDEAN

* Peruvian President Martin Vizcarra threatened to shut down Congress and call for new legislative elections unless it passes anti-corruption proposals, Reuters reported. Vizcarra accused lawmakers of blocking his proposed reforms.

* The most recent round of talks held in Norway between the Venezuelan government and the opposition ended without an agreement, the Financial Times reported, citing negotiators from the opposition. Both sides "demonstrated their willingness to move forward in the search for an agreed-upon and constitutional solution for the country," Bloomberg News reported, citing Norwegian Foreign Minister Ine Eriksen Soreide.

PAN LATIN AMERICA

* Itaú Unibanco Holding SA estimates dollar debt sales of between $65 billion and $75 billion for 2019, the lowest figure since the global financial crisis a decade earlier, Bloomberg News reported. Baruc Saez, head of investment banking for Latin America at the bank, said the region is benefiting from a dovish policy pushing low interest rates, but that "there's plenty of funds chasing very few deals."

IN OTHER PARTS OF THE WORLD

* Middle East & Africa: Hapoalim Q1 profit up; Israel faces snap election; Liberia revamps central bank

* Europe: UK slams EU plan on share trade; funds eye Sabadell unit; Amundi's Germany plans

Pablo Jiménez Arandia contributed to this article.

The Daily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.