Brazil’s WEG jumps after Q4 earnings beat
Fed policymakers concerned about cutting rates too soon – minutes
Stocks down 0.3%, FX slips 0.1%
Updated at 2:30pm ET/1930 GMT
By Shashwat Chauhan and Lisa Pauline Mattackal
Feb 21 (Reuters) –Most Latin American currencies edged lower on Wednesday, as minutes from the U.S. Federal Reserve’s January meeting indicated policymakers remained wary of prematurely cutting interest rates.
The bulk of Fed policymakers in January were concerned about the risks of cutting interest rates too soon, according to minutes of the meeting released Wednesday.
MSCI’s gauge for Latin American currencies .MILA00000CUS edged down 0.1%, with most currencies in the region flat to lower against the dollar.
However, traders maintained bets for a June start to interest rate cuts.
“The market is already beginning to pull back from expectations (for interest rate cuts) at the beginning of the year, markets and the Fed are finding a better equilibrium,” said Chris Maxey, chief market strategist at Wealthspire Advisors.
MSCI’s gauge of Latin American stocks .MILA00000PUS fell 0.3% after four sessions of gains.
Emerging market assets have struggled in 2024 as investorsre-assess when borrowing costs could come down as U.S. inflation and economic data remains strong.
MSCI’s Latam stocks index is down over 3% year-to-date versus a 0.3% rise in its global emerging markets index .MSCIEF.
“Many of (the) emerging markets look cheap relative to their own history, and countries around the world … the struggle for investors is that it’s not really a homogeneous universe,” Maxey said.
The Chilean peso CLP= lagged regional peers, snapping two session of gains and losing 0.7% against the greenback. Chilean shares .SPIPSA dipped 1.5%.
The Brazilian real BRL= lost 0.2%, and Colombia’s peso COP= was flat.
Brazil central bank President Roberto Campos Neto, said that Brazil has service inflation still at a level “slightly above” the ideal, assessing that monetary authority does not have the components necessary to conclude what the pace of the indicator’s “last mile” will be on the path to convergence.
Shares in Brazil .BVSP fell 0.1% and Mexican shares .MXX lost 0.6%.
Brazilian motor maker WEG WEGE3.SA rose 6% after beating fourth-quarter earnings estimates.
Shares of Mexican conglomerateAlfa ALFAA.MX dropped 2.3% after announcing plans to cut capital spending and dividends this year.
Mexico’s peso MXN= also held steady at 17.0560 per dollar after data showed Mexican retail sales fell 0.9% in December.
Peru’s sol PEN= lost 0.4%,on track to snap a four-day winning streak.
Brazil will announce Monday new measures to help foreigners with foreign exchange hedges on sustainable investments, sources told Reuters.
HIGHLIGHTS
** Financial debt for Mexico’sPemex totaled $106.8 bln at end of 2023
** World Bank warns emerging economies need to grow ‘much faster’ to repay debt
**Global debt hits record high at $313 trillion -IIF
Key Latin American stock indexes and currencies at 1930 GMT:
|
Latest |
Daily % change |
|
|
MSCI Emerging Markets .MSCIEF |
1020.43 |
0.14 |
|
MSCI LatAm .MILA00000PUS |
2571.11 |
-0.34 |
|
Brazil Bovespa .BVSP |
129775.66 |
-0.11 |
|
Mexico IPC .MXX |
56913.07 |
-0.55 |
|
Chile IPSA .SPIPSA |
6252.15 |
-1.53 |
|
Argentina MerVal .MERV |
1048758.03 |
-1.034 |
|
Colombia COLCAP .COLCAP |
1264.33 |
1.51 |
|
Currencies |
Latest |
Daily % change |
|
Brazil real BRBY |
4.9376 |
-0.13 |
|
Mexico peso MXN=D2 |
17.0560 |
-0.05 |
|
Chile peso CLP=CL |
967.9 |
-0.65 |
|
Colombia peso COP= |
3920.5 |
0.08 |
|
Peru sol PEN=PE |
3.7845 |
-0.36 |
|
Argentina peso (interbank) ARS=RASL |
837.8000 |
-0.06 |
|
Argentina peso (parallel) ARSB= |
1095 |
1.83 |
Reporting by Shashwat Chauhan in Bengaluru
Editing by Ros Russell and Cynthia Osterman