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Good Job News Not Enough to Cheer Brazilian Markets

Brazilian shares mostly declined, as global crude oil prices closed above US$ 55 a barrel for the first time on worries regarding limited supplies for heating oil ahead of winter in the northern hemisphere.

The further gains in oil overshadowed positive economic news in Brazil. Brazil’s benchmark Bovespa Index dropped 323.48 points, or 1.40%.


Brazilian stocks collapsed on oil price concerns, despite favorable government data on both jobs and inflation.


The state-run Brazilian Institute of Geography and Statistics reported that the country’s unemployment rate fell to 10.9% in September from 11.4% in August, hitting the lowest level since December 2003.


The result appeared to support projections that Brazil’s economy could grow more than 4% this year after shrinking 0.2% in 2003.


Also, Brazil’s IPCA Broad Consumer Price Index added 0.32% for the period from mid-September to mid-October, down from the 0.49% rise in the prior one- month period. Most economists predicted an increase by 0.35% or more.


The release supported the view of those analysts who believe Brazil’s inflation is broadly under control in spite of sky-high world oil prices.


Data showing easing inflation could prevent another domestic rate hike, after Brazil’s central bank increased its benchmark Selic rate by 50 basis points to 16.75% earlier this week.


Thomson Financial Corporate Group
http://www.thomsonfinancial.com/
PRNewswire

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