Latam FX, stocks edge lower; Banxico's rate decision on tap
Updated at 1510 GMT
Brazil lifts 2025 inflation projections to 4%
Brazil's Suzano up on dropping plan to buy International Paper
Turkey, Czech announce monetary policy decisions
Rand drops on reported discord over cabinet posts
Stocks, FX off 0.5% each
By Johann M Cherian
June 27 (Reuters) -Most Latin American currencies and equities slipped on Thursday, while investors braced for an interest rate decision out of Mexico and exercised caution following a change in inflation forecasts out of Brazil.
Mexico's peso MXN= slipped 0.1% ahead of a central bank decision due at 1900 GMT. A majority of economists polled by Reuters expect borrowing costs to be left unchanged at 11% against the backdrop of persistent price pressures and as the U.S. Federal Reserve delays its monetary easing cycle.
"Regardless of the upcoming Fed's decisions, we continue to think that Banxico has ample room to resume the rate cut cycle after the first cut back in March," a group of economists led by Javier Amador at BBVA research said.
"Doves will likely opt for delaying an uneasy debate with the ultra hawks and vote for a pause driven by the recent exchange rate volatility and political uncertainty."
Cabinet appointments in President-elect Claudia Sheinbaum's government were also on tap through the day. The peso had depreciated significantly and is down over 7.4% year-to-date following her landslide win earlier in the month.
MSCI's index tracking Latam currencies .MILA00000CUS slipped 0.5%, with Brazil's real BRL= hovering at levels last seen in January 2022 it hit in the previous session.
Brazil's local central bank upped its 2025 inflation forecasts to 4%, citing stronger-than-expected activity which led it to halt interest rate cuts earlier this month. The regulator has a continuous inflation target of 3%.
Currency of copper producers, Chile CLP= and Peru PEN= strengthened 0.3% each, as prices of the red-metal rebounded from a two-month low. MET/L
On the equities front, MSCI's index tracking Latin American stocks .MILA00000CUS slipped 0.5%.
Brazil's Bovespa index .BVSP climbed 0.6%, with Suzano SUZB3.SA jumping 13.8% after the pulpmaker said it has terminated talks to buy International Paper IP.N.
Petrobras PETR4.SA climbed 1% after brokerage Bank of America upgraded the oil firm to "buy".
Equatorial EQTL3.SA advanced5% after the power company was the only bidder for hold a 15% stake in water utility Sabesp SBSP3.SA, which is currently under a privatization process.
Elsewhere, Bolivia's boliviano BOB= edged up 0.1% in thin trades after an attempted coup was thwarted.
Czech's koruna EURCZK= weakened 0.4% to an eight-week low against the euro and yield on the 5-year bond slipped 3 basis points after the local central bank trimmed its benchmark interest rate by 50 basis points to 4.75%, more than expectations.
Turkey's lira TRYTOM=D4 showed little reaction after the central bank left its main interest rate unchanged at 50%.
South Africa's rand ZAR= depreciated over 1% on reports of major disagreements over cabinet posts.
Kenya's shilling KES= slipped as civil unrest continued even after the president bowed to pressure to withdraw a tax hike bill.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1081.78 | -0.41 |
MSCI LatAm .MILA00000PUS | 2169.67 | -0.56 |
Brazil Bovespa .BVSP | 123231.15 | 0.48 |
Mexico IPC .MXX | 52171.95 | -0.56 |
Chile IPSA .SPIPSA | 6491.47 | -0.32 |
Argentina MerVal .MERV | 1588852.94 | 0.913 |
Colombia COLCAP .COLCAP | 1373.33 | 0.32 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.5314 | -0.24 |
Mexico peso MXN=D2 | 18.3450 | -0.11 |
Chile peso CLP=CL | 950.1 | 0.06 |
Colombia peso COP= | 4161.6 | -0.41 |
Peru sol PEN=PE | 3.82 | -0.05 |
Argentina peso (interbank) ARS=RASL | 911.0000 | 0.11 |
Argentina peso (parallel) ARSB= | 1330 | 2.63 |
Reporting by Johann M Cherian in Bengaluru; Editing by Alistair Bell
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