Latam currencies head for worst monthly performance since Sept 2022
Colombia cuts interest rates as expected
Mexico economy grows 0.2% in Q1 from previous quarter
Brazil’s job creation outpaces expectations in March
Argentina lower house approves Milei reform bill
Latam FX down 1.1%, stocks shed 2.1%
Updated at 1905 GMT
By Bansari Mayur Kamdar and Johann M Cherian
April 30 (Reuters) –Latin American stocks and currencies fellon Tuesday, headed for monthly losses, as U.S. interest rate uncertainties and geopolitical tensions weighed, while Colombia’s peso extended declines after a local central bank policy decision.
The MSCI index for Latin American currencies .MILA00000CUS fell 1.1% and was on track for its biggestmonthly drop in 19 months. Regional stocks .MILA00000PUS shed 2.1% by 1905 GMT, on course for its worst month since January.
Investors havedialed back expectations for the timing and magnitude of U.S. rate cuts this year after hotter-than-expected inflation reports.
“A spike in global volatility and a hawkish Fed have weighed on LatAm FX, particularly in crowded high-carry currencies,” BofA Global Research analysts wrote.
“With all central banks already cutting rates in the region, the appeal of carry as an investment thesis declines under high global volatility.”
The dollar index =USD strengthened 0.5%, with all eyes on the Fed’s rate decision on Wednesday, when it is expected to keep borrowing costs unchanged.
The Mexican peso MXN= slipped 0.6% against a firm dollar after data showed the oil producing country’seconomy posted better-than-expected first-quarter growth versus the previous three months.
Brazil’s real BRL= fell 1.3% after data showedcreation of formal jobs in March significantly outpaced expectations, while Chile’s peso CLP= lost 1.9% following news thatunemployment in the copper producing nation rose to 8.7% in the quarter through March as expected.
Manufacturing production in Chile fell 2.1% in March on a yearly basis, the country’s INE statistics agency said, well below the 4.7% growth expected, while the Andean nation’s copper output was flat.
Colombia’s peso COP= slid 1.8% after the domestic central bank trimmed the benchmark interest rate by 50 basis points to 11.75%, as expected, as policymakers looked to boost the economy while containing inflation.
Bucking regional weakness, Argentina’s MerVal index.MERV jumped 2.1% to a record high after the country’s lower house of Congress approved President Javier Milei’ssweeping reform bill ahead of a final Senate vote and backing articles related to privatizing state bodies and labour reform.
More broadly, emerging market stocks were set to end their third month higher supported by recovery in China stocks, while emerging market currencies .MIEM00000CUS were set for a monthly decline.
Local currency emerging market bonds have lost investors 2.2% this month.
Key Latin American stock indexes and currencies at 1910 GMT:
|
Latest |
Daily % change |
|
|
MSCI Emerging Markets .MSCIEF |
1045.23 |
-0.58 |
|
MSCI LatAm .MILA00000PUS |
2433.99 |
-2.2 |
|
Brazil Bovespa .BVSP |
126020.54 |
-1.05 |
|
Mexico IPC .MXX |
56963.24 |
-1.5 |
|
Chile IPSA .SPIPSA |
6537.21 |
-0.2 |
|
Argentina MerVal .MERV |
1337895.13 |
2.28 |
|
Colombia COLCAP .COLCAP |
1369.85 |
-0.81 |
|
Currencies |
Latest |
Daily % change |
|
Brazil real BRBY |
5.1864 |
-1.39 |
|
Mexico peso MXN=D2 |
17.1067 |
-0.61 |
|
Chile peso CLP=CL |
959 |
-1.82 |
|
Colombia peso COP= |
3927.5 |
-1.81 |
|
Peru sol PEN=PE |
3.765 |
-1.24 |
|
Argentina peso (interbank) ARS=RASL |
876.5000 |
0.06 |
|
Argentina peso (parallel) ARSB= |
1020 |
2.45 |
Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Ed Osmond and Richard Chang
