Latam stocks, FX slip on fiscal uncertainty, interest rates
Updated at 1449 GMT
Sheinbaum taps Garcia Harfuch as security minister
Argentina analysts lower inflation forecast for 2024
Romania cuts interest rate for first time in three years
MSCI Latam FX index to notch first weekly gain since May
Latam stocks off 0.4%, FX slips 0.1%
By Johann M Cherian
July 5 (Reuters) -Most Latin American stocks and currencies slipped on Friday, after strong gains earlier in the week, as concerns around fiscal stability in the leading regional economies and the outlook on interest rates dominated the mood.
MSCI's index tracking currencies in the region .MILA00000CUS slipped 0.1% against the dollar, but was set for its first weekly gain since May 13.
Investors reflected on a mixed U.S. jobs report, and held on to bets that the Federal Reserve might deliver two interest rate cuts in 2024.
Most central banks in Latin America have paused their monetary easing cycles, as analysts expect the Fed to defer its first interest rate cut.
Brazil's real BRL= slipped 0.2%, but was on track for a weekly gain of over 1.5%. The currency made gains in the last two sessions after President Luiz Inacio Lula da Silva committed his government to fiscal stability.
The leader's comments on greater fiscal spending and on the domestic central bank's stance on restrictive monetary policy had depressed the real towards the end of the second quarter.
"After a sharp sell-off over the past month, we believe the market is close to hitting bottom," said Elizabeth Johnson, managing director, Brazil research at TS Lombard.
"Lula's attacks on Banco Central Governor Campos Neto are likely to cease for now, but market jitters are only likely to fully dissipate when a new governor is named."
Mexico's peso MXN= dipped 0.2%, but was on track to snap a three-day winning streak. President-elect Claudia Sheinbaum continued to name cabinet officials ahead of taking office on Oct 1, with Omar Garcia Harfuch set to be her security minister.
Oil producer Colombia's COP= also slipped 0.2% in light trading.
Copper exporters Chile CLP= and Peru PEN= climbed 0.2% and 0.3%, respectively, as prices of copper hit a three-week high. MET/L
On the equities front, a gauge tracking regional bourses .MILA00000PUS lost 0.4%, but was set for a weekly rise of over 2%.
Brazil's Bovespa .BVSP slipped 0.1%, while Mexican stocks .MXX lost 0.2%.
Argentina's peso traded at 1385 to the dollar in parallel trade, while the MerVal index .MERV rose 0.6%, ahead of a monetary policy report by the domestic central bank later in the day.
A central bank survey showed analysts expect annual inflation to stand at 138.1%, compared with an earlier estimate of 146.4%.
Elsewhere, Romania's leu EURRON= showed little reaction after the local central bank cut its benchmark interest rate by a quarter point.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1104.49 | 0.03 |
MSCI LatAm .MILA00000PUS | 2222.10 | -0.43 |
Brazil Bovespa .BVSP | 125841.64 | -0.26 |
Mexico IPC .MXX | 52548.98 | -0.2 |
Chile IPSA .SPIPSA | 6479.94 | -0.8 |
Argentina MerVal .MERV | 1625004.56 | 0.76 |
Colombia COLCAP .COLCAP | 1389.69 | 0.36 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.4976 | -0.23 |
Mexico peso MXN=D2 | 18.1290 | -0.29 |
Chile peso CLP=CL | 932 | 0.24 |
Colombia peso COP= | 4098.99 | -0.19 |
Peru sol PEN=PE | 3.7955 | -0.43 |
Argentina peso (interbank) ARS=RASL | 915.5000 | -0.16 |
Argentina peso (parallel) ARSB= | 1385 | 1.44 |
Reporting by Johann M Cherian in Bengaluru; editing by Barbara Lewis
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