Most Latam FX slip at start of data-heavy week, oil prices weigh
Azul reaches deal with bondholders for additional financing
Mexico's Cemex lowers core earnings guidance for Q3
Country risk index for Argentina falls to over 5-year low
Updated at 4:15 p.m. ET
By Johann M Cherian
Oct 28 (Reuters) -Currencies of most Latin American economies slipped on Monday as investors awaited a string of country-specific data reports throughout the week, while Colombia's peso fell to levels not seen in more than a year, tracking weak crude prices.
MSCI's Latam currencies index .MILA00000CUS slipped 0.3% as of 4:15 p.m. ET, led by oil exporters Colombia's peso COP= and Mexico's peso MXN= after crude oil prices slid 5% as the Middle East tensions appeared to have subsided briefly. The currencies were down 0.3% and 0.4% against the dollar, respectively.
Colombia's interest-rate decision is also due on Oct. 31, with a Reuters poll predicting a sped-up monetary policy easing.
Goldman Sachs analysts expect a 50-basis-point rate cut. "We think that the recent inflation and activity prints, a weaker currency tracking at its lowest level in a year, and recent market-unsettling domestic developments are consistent with a moderate 50-bps cut," they said.
Among others, Brazil's real BRL= slipped 0.1% against the dollar ahead of Thursday's September budget data. Concerns around the country's fiscal stability had sparked a sell-off in the real earlier in the year, making it one among currencies with the steepest declines in the region.
Sentiment also remained weak as markets dialed back expectations for another 50-bps cut by the Federal Reserve in November, which has put the greenback on track for its sharpest monthly rise since April 2022.
Markets also braced for the possibility of a second Donald Trump USpresidency, with real-money prediction market platform PredictIt suggesting the Republican candidate has an edge over Democrat Kamala Harris.
Trump's policies around trade, security and immigration are expected to undermine assets in Latin America, according to analysts.
As for domestic triggers, Chile's employment data, Mexico's third-quarter GDP and manufacturing prints out of some of the Latam countries are also on investors' watch lists.
Copper producer Chile's peso CLP= rebounded 0.2% after two straight days of losses, while Peru's sol PEN= was up 0.1% after hitting a one-month high in early trade.
Over the weekend, Chile's moderate right made gains in regional elections while President Gabriel Boric's coalition avoided crushing defeat, pointing to a return to less polarized politics ahead of the 2025 presidential election.
Meanwhile, Argentina's closely-watched country risk index, a reflection of how investors view the country's debt, fell to its lowest level since the middle of 2019, reflecting rising market optimism in libertarian President Javier Milei's government.
MSCI's gauge for regional equities .MILA00000PUS edged up 0.5%, with Brazil's Bovespa .BVSP climbing 1%.
Azul AZUL.N shot up 15% after the carrier reached a deal with an existing group of bondholders to obtain additional financing as part of restructuring that it expects to ease market concerns about its debt load.
Mexico's main stock index .MXX was largely flat, with Cemex CEMEXCPO.MX losing 8% after the cement producer reported a lower third-quarter core earnings and reduced its full-year profit guidance.
Latin American market prices from Reuters:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1138.03 | 0.28 |
MSCI LatAm .MILA00000PUS | 2179.58 | 0.57 |
Brazil Bovespa .BVSP | 131265.38 | 1.06 |
Mexico IPC .MXX | 51819.22 | 0.07 |
Chile IPSA .SPIPSA | 6735.46 | -0.28 |
Argentina Merval .MERV | 1851740.18 | -1.124 |
Colombia COLCAP .COLCAP | 1339.48 | 0.37 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.7103 | -0.05 |
Mexico peso MXN= | 20.0311 | -0.41 |
Chile peso CLP= | 946.84 | 0.19 |
Colombia peso COP= | 4338.25 | -0.28 |
Peru sol PEN= | 3.763 | 0.13 |
Argentina peso (interbank) ARS=RASL | 987 | -0.15 |
Argentina peso (parallel) ARSB= | 1200 | 2.08 |
HIGHLIGHTS:
** Colombia's government expands debt issuance cap by over $2 bln
** Nigeria signs funding deal with IFC to boost naira currency financing
Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Jan Harvey and Alistair Bell
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