Latin American stocks, currencies rebound after recent losses
Updated at 1502 GMT
Mexico's peso to weaken further in medium term, poll shows
Rio paves way for new financial exchange to rival B3
Polish central bank leaves rates unchanged
Latin American stocks up 2.6%, currencies rise 1.2%
By Johann M Cherian
July 3 (Reuters) -Currencies and equities across most resource-rich Latin American countries rebounded from recent losses on Wednesday, as base metal prices ticked higher, but concerns around underlying macroeconomic issues lingered.
The MSCI index that tracks currencies in the region .MILA00000CUS added more than 1.2%, rebounding from a six-day losing streak.
The dollar also weakened to a two-week low as the latest economic data fanned hopes of interest rate cuts later this year. The Fed is due later on Wednesday to release the minutes from its last policy meeting. USD/
Financial markets are squarely focused on the release on Friday of the monthly U.S. employment report for June, which could offer clues on the outlook for the Fed's policy path.
"It's definitely some stabilization pretty much across the board. We're in this low volatility window and Friday's (U.S.) payrolls is going to be pretty important," said Padhraic Garvey, regional head of research for the Americas at ING Financial Markets.
Brazil's real BRL= jumped 1.8% after logging losses in five of the last six sessions, as prices of iron ore, a top export for the country, hit a four-week high, while investors assessed better-than-expected industrial production data for May.
Still, the currency hovered near two-year lows amid concerns about the country's fiscal stability. Brazil's finance minister said the government aims to present and approve a bill to renegotiate state debts with the federal government soon.
"If you ask me, what's the biggest issue in Brazil? It's got to be the fiscal deficit, which remains elevated, and that efforts to bring it down are being frustrated," Garvey added.
The currencies of Chile CLP= and Peru PEN=, the world's two largest copper producers, rose more than 1% each as prices of the red metal jumped. MET/L
Mexico's peso MXN= strengthened 0.7%. The currency on Friday logged its biggest quarterly drop since the COVID-19 pandemic and a poll showed it could remain weak in the medium term given political uncertainty at home and abroad.
On the equities front, MSCI's index tracking regional bourses .MILA00000PUS rallied 2.7% to clinch a one-week high, with Brazil's Bovespa index .BVSP adding 1.3%, underpinned by miner Vale's VALE3.SA 2.7% jump.
The city of Rio de Janeiro signed into law a bill that lowers taxes for the opening of a new financial exchange to compete with Sao Paulo's B3 B3SA3.SA. Shares of the exchange operator were last up 0.8%.
Chile's main index .SPIPSA added 1.9%, with LATAM Airlines LTM.SN adding 1.3% after the carrier said it intends to proceed with the process of re-listing American Depositary Receipts (ADRs) in tandem with the first secondary sale.
The main stock indexes in Peru SPIPSA and Mexico .MXX also rose more than 1.3% each.
Elsewhere, Poland's zloty EURPLN= climbed 0.3% against the euro after the country's central bank left its main interest rate on hold at 5.75%, as expected.
The yield on Egypt's dollar-denominated sovereign bonds XS1953057491=TE slipped more than 31 basis points following a cabinet reshuffle that included new finance and foreign ministers.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1094.08 | 1.32 |
MSCI LatAm .MILA00000PUS | 2213.99 | 2.53 |
Brazil Bovespa .BVSP | 126435.64 | 1.32 |
Mexico IPC .MXX | 52917.31 | 1.87 |
Chile IPSA .SPIPSA | 6500.14 | 1.8 |
Argentina MerVal .MERV | 1640767.61 | 0.413 |
Colombia COLCAP .COLCAP | 1385.94 | 0.17 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.5861 | 1.42 |
Mexico peso MXN=D2 | 18.1530 | 0.52 |
Chile peso CLP=CL | 937 | 1.20 |
Colombia peso COP= | 4094.91 | 0.66 |
Peru sol PEN=PE | 3.786 | 0.59 |
Argentina peso (interbank) ARS=RASL | 915.0000 | -0.05 |
Argentina peso (parallel) ARSB= | 1405 | 1.78 |
Reporting by Johann M Cherian in Bengaluru; Editing by Paul Simao
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