Latam FX slides as lower commodity prices weigh
Updated at 10:35 a.m. ET/ 1435 GMT
Brazil's Haddad backs limiting spending
Mexican lower house passes judicial reform legislation
Latam FX down 1%, stocks off 1.5%
By Shashwat Chauhan
Oct 15 (Reuters) -Most currencies of resources-rich Latin America slipped on Tuesday as prices of commodities such as oil and copper remained under pressure over an uncertain demand outlook, with Mexico's peso the worst hit.
Local media reported that China may raise an additional 6 trillion yuan ($850 billion) from special treasury bonds over three years to stimulate a sagging economy, a figure that failed to revive sentiment.
"Markets listen but hear what they want. There is no better example of this than China where the actions of the government to bolster property, consumer mood and markets has not proved sufficient," Bob Savage, head of markets strategy and insights at BNY said in a note.
Copper prices sank to a three-week low amid the confusion over the scale of the stimulus in China. Top copper producer Chile's peso CLP= eased 1.2%, and number two producer Peru's sol PEN= dipped 0.3% in low volumes.
Later in the week, Chile's central bank is widely expected to lower its benchmark interest rate by 25 basis points to 5.25%.
Currencies of crude producing countries dropped as oil prices tumbled to a near two-week low due to a weaker demand outlook and after a media report suggested Israel would not strike Iranian oil targets, easing fears of a supply disruption. O/R
Brazil's real BRL= weakened 0.9%, while Colombia's peso COP= lost 1.1%.
Brazil's Finance Minister Fernando Haddad said in an interview that financial markets were right to be worried about the country's fiscal situation, but pledged to work to improve it, including by limiting spending.
Tumbling oil prices also hurt the Mexican peso MXN=, which shed 1.5%, hitting two week lows.
Lawmakers in Mexico's lower house of Congress voted late on Monday to approve legislation to implement a controversial judicial overhaul that will move the country to a system of judges elected by popular vote.
A broader gauge of Latin American currencies .MILA00000CUS dipped close to 1%, while an index for stocks .MILA00000PUS eased 1.5%.
Regional heavyweight Brazil's Bovespa benchmark .BVSP lost 0.1%, with mining and energy firms at the helm of losses.
Meanwhile in Argentina, the country's risk fell 40 units to hit 1,068 basis points, hitting its lowest level since a major debt restructuring in September 2020.
HIGHLIGHTS
** IMF sees Mexico economic growth slowing in 2024, 2025
** Nigeria inflation rises for first time in three months
** South African business confidence dips, but post-election trend still positive
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1149.64 | -0.9 |
MSCI LatAm .MILA00000PUS | 2179.55 | -1.47 |
Brazil Bovespa .BVSP | 130948.05 | -0.04 |
Mexico IPC .MXX | 52026.97 | 0.05 |
Chile IPSA .SPIPSA | 6544.47 | -0.42 |
Argentina Merval .MERV | 1796157.75 | -0.458 |
Colombia COLCAP .COLCAP | 1324.16 | -0.17 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.644 | -0.92 |
Mexico peso MXN= | 19.644 | -1.46 |
Chile peso CLP= | 938.1 | -1.15 |
Colombia peso COP= | 4245.65 | -1.11 |
Peru sol PEN= | 3.7679 | -0.26 |
Argentina peso (interbank) ARS=RASL | 979.5 | 0.10 |
Argentina peso (parallel) ARSB= | 1180 | 0.85 |
Reporting by Shashwat Chauhan in Bengaluru, editing by Nick Zieminski
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