Mexican Peso leads Latam FX higher on inflation data
Brazil's Magalu up on partnership with China's Aliexpress
Mexico's consumer prices rise in early June
MSCI indexes hit two-week highs
Latam stocks up 1.4%, FX add 1%
Updated at 3 p.m. ET/1900 GMT
By Johann M Cherian
June 24 (Reuters) -Most Latin American equities and currencies climbed on Monday, with Mexico's peso among the top gainers after data pointed to price pressures in the region's second-largesteconomy, ahead of a central bank policy decision later in the week.
The peso MXN= rose nearly 0.9% to an over two-week high at 18 against the dollar, while the yield on 10-year treasury bonds ticked higher after data showed consumer prices increased 0.2% during the first half of June, compared with economists' forecasts of a 0.1% increase.
The oil exporter's currency had been among the better performers as the local central bank delayed further interest rate cuts. However, concerns around the incumbent Morena party's election win and possible constitutional reform has brought the peso down over 5% year-to-date.
"The combination of a softening economic recovery and tight financial conditions will likely cap inflation as (the year) progresses, assuming the (peso) stabilises as we expect," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics.
Monday's data reinforced expectations that Mexicocould leave its benchmark interest rate on hold at 11% later in the week.
"Depreciation will continue to have a direct effect on inflation and inflation expectations ... making Banxico's Board members more cautious than they already were," Abadia added.
An index tracking currencies in the resources-rich region .MILA00000CUS climbed 1% to a near two-week high against a weakening dollar, with Brazil's real BRL= up 0.9%.
The market focus will be on U.S. Personal Consumption Expenditure data for May, the Federal Reserve's preferred inflation gauge that could influence the outlook for its monetary policy and consequently policy easing cycles in most emerging economies.
The Colombian peso COP= rose 1.4% to a week's high, ahead of its central bank decision later this week. The currency of the world's largest copper producer, Chile CLP= lost0.5%.
Among stock markets, MSCI's index tracking regional bourses .MILA00000PUS rose 1.4% to a two-week high, with Brazil's Bovespa .BVSP adding 1%.
Magazine Luiza MGLU3.SA jumped more than 10% after the retailer and Chinese e-commerce powerhouse Aliexpress entered into an agreement for both firms to list and sell products on each other's platforms.
Meanwhile, the Argentine peso ARSB= in the parallel market fell to a record low, as per traders. Data showed the country's unemployment rate stood at 7.7% in the first quarter of the year, up from 6.9% a year ago.
Key Latin American stock indexes and currencies:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1084.76 | -0.2 |
MSCI LatAm .MILA00000PUS | 2215.44 | 1.46 |
Brazil Bovespa .BVSP | 122547.02 | 0.99 |
Mexico IPC .MXX | 52476.17 | -0.59 |
Chile IPSA .SPIPSA | 6459.67 | -0.45 |
Argentina MerVal .MERV | 1536835.07 | -2.514 |
Colombia COLCAP .COLCAP | 1375.78 | 0.76 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.3919 | 0.90 |
Mexico peso MXN=D2 | 17.9430 | 0.87 |
Chile peso CLP=CL | 944.9 | -0.50 |
Colombia peso COP= | 4090.69 | 1.40 |
Peru sol PEN=PE | 3.8015 | -0.27 |
Argentina peso (interbank) ARS=RASL | 908.5000 | -0.44 |
Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Alexander Smith and Alistair Bell
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