Latam assets jump after US jobs data; Mexico cuts interest rate
Mexico inflation rises 5.57% in July
Chile's consumer prices up 0.7% in July
Rate decisions due from Peru later in the day
Eletrobras, Embraer shares up after results
Latam stocks index up 2%, FX up 0.9%
Updated at 1920 GMT
By Lisa Pauline Mattackal and Ankika Biswas
Aug 8 (Reuters) -Latin American assets broadlyjumped on Thursday as encouraging U.S. jobs data broughtsome optimism back to cautious markets, while the Mexicanpeso held on to its strong footing even after a surprise interest-rate cut.
The Mexican peso MXN= was up 1.6% against the dollar, but briefly pared gains after the central bank lowered its benchmark interest rate to 10.75% in a divided vote and noted it expects inflationary pressures to allow for further discussion of rate adjustments going forward.
The decision comes on the heels of data earlier in the day showing the country's headline inflation in July reached a level not seen in over a year, while the core index showed signs of moderation.
Reuters reported Mexico's ruling party is considering changes to a proposed judicial reform in a bid to calm market concerns, including making the election of judges a staggered process over many years to reduce fears of a political takeover of the judiciary.
Meanwhile, datashowing an improvement in U.S. jobless claims figures lifted hopes that fears about a slowdown in the world's largest economy, the United States, were overstated after those concerns sparked a bout of market volatility that sharply hit riskier emerging market assets.
The MSCI index for Latam currencies .MILA00000CUS rose 0.9% to its highest level since late July, while the stocks gauge .MILA00000PUS rose nearly 2% to a one-week high.
"The depreciation that a lot of these currencies have experienced actually represents some pretty attractive entry points," said Brendan McKenna, FX strategist at Wells Fargo, though adding emerging market currencies were likely to be somewhat volatile until the U.S. economic picture becomes more clear.
Latam currencies jumped across the board, with the Brazilian real BRL= rising 1.5% and hitting a two-week high intraday.
The Colombian peso COP= also climbed 1.8% to a one-week high, tracking strong gains in oil prices. The country's inflation data is also scheduled for later in the day.
A Reuters poll showed Colombia's economy is forecast to have grown 2.2% in the second quarter, picking up pace from the first three months.
Among others, Chile's peso CLP= rose 0.8%, with data reflecting the nation's consumer prices rose slightly above expectations in July.
In last month's projections, the Chilean central bank cautioned inflation would significantly rebound and only meet its 3% target by the first half of 2026.
Peru' sol PEN= inched up 0.1% ahead of a central bank monetary policy decision, due later in the day.
Argentina's benchmark stock index .MERV leapt 4.7%, leading broad gains in Latam stocks.
Shares of planemaker Embraer EMBR3.SA jumped 9.5% after second-quarter net income jumped almost 40%, while shares of Brazil's largest power company Eletrobras ELET3.SA rose 2.2% after the company reported a nearly 8% rise in net profit.
Key Latin American stock indexes and currencies at 1920 GMT:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1047.71 | -0.25 |
MSCI LatAm .MILA00000PUS | 2207.28 | 1.73 |
Brazil Bovespa .BVSP | 128664.02 | 0.9 |
Mexico IPC .MXX | 53051.05 | 0.7 |
Chile IPSA .SPIPSA | 6275.72 | 1.34 |
Argentina Merval .MERV | 1529340.55 | 5.315 |
Colombia COLCAP .COLCAP | 1307.47 | 0.82 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.5673 | 1.19 |
Mexico peso MXN= | 18.9626 | 1.58 |
Chile peso CLP= | 935.5 | 0.78 |
Colombia peso COP= | 4059 | 1.75 |
Peru sol PEN= | 3.7165 | 0.14 |
Argentina peso (interbank) ARS=RASL | 936 | 0 |
Argentina peso (parallel) ARSB= | 1355 | 2.21402214 |
Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Alistair Bell and Andrea Ricci
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