Latam assets mixed in wait for global growth signals
Interest-rate increase is on table - Brazil central bank director
Azul shares fall after results
Chile expected to cut rates to 5.5% in September - poll
Peru copper output slides nearly 12% in June
Stocks flat, FX down 0.5%
Updated at 4:03 p.m. ET/ 2003 GMT
By Ankika Biswas and Lisa Pauline Mattackal
Aug 12 (Reuters) -Latin American stocks and currencies were largely mixed on Monday, as attention moved to key data later in the week, including U.S. inflation data crucial in determining the Federal Reserve's monetary policy path amid recession fears.
The MSCI Latam stocks index .MILA00000PUS was flat and the currencies index .MILA00000CUS was down 0.5%, easing from the three-week intraday highs after last week's strong gains.
Investors awaited key U.S. inflation and retail sales data later in the week for signals on growth in the world's largest economy, as well as retail sales and industrial production figures from China.
Emerging market assets have broadly recovered from last week's sharp sell-off sparked by concerns about growth in both the U.S. and China, and the week's upcoming data will test whether risk sentiment has truly recovered.
Higher crude prices, factoring in potential disruptions to Middle East supply, in part lifted currencies of Latin American producers. Colombia's peso COP= rose 0.5% against the dollar, and Brazil's real BRL= was up 0.2%.
Brazil's central bank monetary policy director Gabriel Galipolo said that an interest-rate increase is on the table.
"Unmoored medium-term inflation expectations reflect a backdrop of an economy with no slack and policy premia - the expectation that the fiscal targets will not be met and that the fiscal and monetary authorities are inclined to accommodate inflation above the target," said Goldman Sachs analysts.
Chile's peso CLP= rose 0.1% on a rally in copper prices, but came off highs as the day progressed.
A poll showed the country's central bank is expected to lower interest rates to 5.50% in September, a 25-basis-point cut from the current 5.75%.
Peru's sol PEN=PE slipped 0.5% to a one-week low. Data showed the world's third-largest copper producer's output of the red metal fell 11.7% year-on-year in June.
Mexico's peso MXN= dropped 1.3% against the dollar, set to snap a three-day gaining streak. The currency was among the worst-hit in Latam during last week's selloff amid deepened worries about slowing global growth and a massive unwinding of yen-funded carry trades.
Bank of Mexico's governor Victoria Rodriguez told Reuters that she expected a recent jump in headline inflation to be short-lived and if that forecast turned out to be valid, further rate cuts could come.
Meanwhile, Citigroup upgraded its stance on Mexican equities to neutral, with the country's benchmark stock index .MXX flat on the day.
On the equities front, Brazilian-listed shares of Azul AZUL4.SA lost nearly 12% after the airline reduced its estimate for 2024 core earnings while bumping up its leverage forecast.
Elsewhere in Latam, a poll showed Argentina's inflation is expected to have slowed to around 4% in July after speeding up in June.
Since the inauguration of libertarian President Javier Milei in December, inflation steadily slowed from 25.5% that month to 4.2% in May but ticked up to 4.6% in June.
Key Latin American stock indexes and currencies as of 2003 GMT:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1069.19 | 0.54 |
MSCI LatAm .MILA00000PUS | 2248.77 | -0.05 |
Brazil Bovespa .BVSP | 131286.15 | 0.51 |
Mexico IPC .MXX | 53057.88 | 0.01 |
Chile IPSA .SPIPSA | 6338.8 | 0.28 |
Argentina Merval .MERV | 1579741.78 | -0.262 |
Colombia COLCAP .COLCAP | 1333.61 | 1.77 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.4977 | 0.17 |
Mexico peso MXN= | 19.0695 | -1.3 |
Chile peso CLP= | 931.5 | 0.06 |
Colombia peso COP= | 4048.89 | 0.49 |
Peru sol PEN= | 3.7305 | -0.5 |
Argentina peso (interbank) ARS=RASL | 938.5 | -0.159829515 |
Argentina peso (parallel) ARSB= | 1335 | 1.498127341 |
Reporting by Lisa Mattackal in Bengaluru; editing by Jonathan Oatis and Rod Nickel
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