Latam FX turn higher in lead-up to all-important Fed rate verdict
Mexico's judicial reform stokes investor fears; analysts bullish
Brazil policy decision due on Wednesday
Colombia could default on payment of external debt
Latam FX, stocks rise 0.5%
Updated at 3:35 p.m. ET/ 1935 GMT
By Ankika Biswas and Shashwat Chauhan
Sept 17 (Reuters) -Most Latin American currencies reversed their declines to rise against the dollar on Tuesday, as investors continued to betthat the U.S. Federal Reserve could opt for an outsized interest rate cut later this week.
MSCI's index for Latam currencies .MILA00000CUS was up 0.5%, set to extend gains to a fourth straight day, while the stocks gauge .MILA00000PUS also rose 0.5%.
The dollar strengthened after fresh data showed U.S. retail sales unexpectedly rose in August, suggesting that the world's largest economy remained on a solid footing through much of third quarter.
However, most Latin American currencies clawed back to trade higher as markets continued to back the case for a 50-basis-point cut by the Fed.
Traders currently see 65% chance of the Fed opting for a larger 50-bps cut, compared to a 34% chance seen a week prior, as per the CME FedWatch Tool.
Though there seems to be a discord in expectations from investors and economists on the sizeof a cut on Wednesday. Economists, who foresee a 25-bps cut, argue that the economy is not in distress to warrant a 50-bps one.
The Fed starts its two-day monetary policy meeting on Tuesday.
Mexico's peso MXN= reversed initial losses and was now up 0.5%, while the stock index .MXX rose 0.4% to top regional peers.
The country's judicial reform has triggered investor concerns about uncertainty over the rule of law and the strength of the government's institutions, yet with the reform now priced in, some analysts argue there may be buying opportunities forming.
"We expect potential constitutional changes in the coming months. One-third of our participants expect new administration policies in Mexico to have a negative impact on asset prices," Bank of America analysts noted.
They also highlighted that participants in a "Latam Fund Manager Survey" are more constructive about Brazil than Mexico, and expect Chile to outperform among the Andean nations.
Brazil's real BRL= added 0.5% against the dollar ahead of a local policy decision on Wednesday, where interest rates are expected to rise by 25 basis points.
"The growth risks for next year are probably skewed to the downside in most (Latin American) economies," Dev Ashish, an economist at Societe Generale noted."
"The risks to our rates forecast are firmly skewed to the upside for Brazil, but they are mostly balanced for other economies."
Chile's peso CLP= was an outlier, down 0.9% ahead of long holiday break, while Peru's sol PEN= added 0.7%.
Colombia's peso COP= also reversed course midday and was now up 0.7%. Citi analysts flagged that the Congress postponed Colombia's budget discussions to September 25.
Colombia is at risk of failing to meet its foreign debt repayments because a special congressional committee has not reached a quorum, the director of public credit said.
El Salvador's sovereign dollar bonds extended their rally after President Nayikb Bukele said the country will not resort to foreign financing, or issue new debt for its spending in fiscal 2025.
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1091.24 | 0.48 |
MSCI LatAm .MILA00000PUS | 2273.11 | 0.49 |
Brazil Bovespa .BVSP | 134669.4 | -0.33 |
Mexico IPC .MXX | 52242.97 | 0.43 |
Chile IPSA .SPIPSA | 6323.95 | -0.36 |
Argentina Merval .MERV | 1816238.33 | 0.186 |
Colombia COLCAP .COLCAP | 1313.85 | -0.31 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.483 | 0.49 |
Mexico peso MXN= | 19.1091 | 0.51 |
Chile peso CLP= | 929.51 | -0.88 |
Colombia peso COP= | 4201.3 | 0.74 |
Peru sol PEN= | 3.7398 | 0.66 |
Argentina peso (interbank) ARS=RASL | 961 | 0 |
Argentina peso (parallel) ARSB= | 1250 | 2 |
Reporting by Ankika Biswas and Shashwat Chauhan in Bengaluru; editing by David Evans and Alistair Bell
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
