Peso hits two-week high on Mexican inflation data
Updated at 1408 GMT
Brazil's Magalu up on partnership with China's Aliexpress
Peru c.bank raises 2024 economic growth forecast to 3.1%
Mexico's consumer prices rise in early June
MSCI indexes hit two-week highs
Latam stocks up 1.8%, FX add 1%
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 largest economy ahead of a central bank policy decision later in the week.
The peso MXN= rose 0.8% to a two-week high at 18 against the dollar, while the yield on 10-year treasury bonds ticked 10 basis points 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, the incumbent Morena party's recent election win sparked concerns around possible constitutional reform, with the peso down nearly 6% 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 could 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 two-week high against a weakening dollar, with Brazil's real BRL= up 0.8%.
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.
Peru's sol PEN= climbed 0.7% in thin trading. The Peruvian central bank slightly raised its annual economic growth forecast to 3.1%, from 3.0% on expectations of greater primary sector support.
Later in the week, investors will also scrutinise Colombia's central bank decision, with economists expecting a 50 basis point cut in its benchmark interest rate to 11.25%. The peso COP= rose nearly 1% over a one-week high in low volumes.
The currency of the world's largest copper producer, Chile CLP= also ticked up 0.4%.
Among stock markets, MSCI's index tracking regional bourses .MILA00000PUS rose 1.8% to a two-week high, with Brazil's Bovespa .BVSP adding 1.1%.
Among single stocks, Magazine Luiza MGLU3.SA jumped more than 11% 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.
Mexico's benchmark index .MXX was flat as investors await president-elect Claudia Sheinbaum's additional cabinet appointees, while Colombia's Colcap .COLCAP rose 0.5%.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1085.58 | -0.12 |
MSCI LatAm .MILA00000PUS | 2223.40 | 1.82 |
Brazil Bovespa .BVSP | 122749.32 | 1.16 |
Mexico IPC .MXX | 52807.80 | 0.04 |
Chile IPSA .SPIPSA | 6493.86 | 0.08 |
Argentina MerVal .MERV | 0.00 | 0 |
Colombia COLCAP .COLCAP | 1372.42 | 0.52 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.3806 | 1.12 |
Mexico peso MXN=D2 | 18.0249 | 0.42 |
Chile peso CLP=CL | 937.5 | 0.29 |
Colombia peso COP= | 4109.5 | 0.93 |
Peru sol PEN=PE | 3.7907 | 0.01 |
Argentina peso (interbank) ARS=RASL | 908.5000 | -0.44 |
Argentina peso (parallel) ARSB= | 1280 | 1.95 |
Reporting by Johann M Cherian in Bengaluru; Editing by Alexander Smith
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