Mexico consumer prices fall in early February
JPMorgan to add Venezuela bonds to EM bond indexes
Chile’s peso at lowest since October 2022
Brazil’s GPA down after Q4 results
FX falls 0.3%, stocks down 0.5%
Updated at 3:15pm ET/2015 GMT
By Shashwat Chauhan and Lisa Pauline Mattackal
Feb 22 (Reuters) –Most Latin American currencies eased on Thursday against a stronger dollar, with Mexico’s peso slipping after asurprise drop in consumer inflation bolstered bets on local interestrate cuts.
Mexico’s currency <MXN=D3>dropped as much as 0.6% to its lowest in overone week after consumer prices fell in the first half of February. It was last down 0.4% at 17.1073 to the dollar.
Slowing inflation data lifted expectations that the central bank was on track to cut interest rates soon, which was reinforced by minutes from its last meeting.
“The drop back in Mexico’s headline inflation rate in the first half of February leaves Banxico on course to begin an easing cycle at March’s Board meeting,” wrote JasonTuvey, deputy chief emerging markets economist at Capital Economics.
“That said, the rise in core services inflation reinforces our view that the easing cycle, when it begins, will be slow going.”
MSCI’s gauge for Latin American currencies .MILA00000CUS fell 0.4%, set for its worst session in two weeks against the U.S. dollar =USD, which rebounded from three-week lows touched earlier on Thursday as investors looked ahead for fresh clues on when the U.S. Federal Reserve would start easing monetary policy.
Latin American currencies have come under pressure in recent weeks as investors continue to push back expectations for a reduction in U.S. borrowing costs, even as many regional central banks prepare to cut rates.
Chile’s peso CLP= dropped over 1% to its lowest since October 2022.
Colombia’s peso COP= fell 0.3% against the dollar,Brazil’s real BRBY=fell 0.1%, andPeru’s sol PEN= rose 0.4%.
Brazil’s main stock index .BVSP rose 0.2% early on, tracking an upbeat start on Wall Street .N and lifted by a 1.2% rise in shares of miner Vale VALE3.SA.
Brazilian food retailer GPA PCAR3.SA fell 5.1% despite reporting a narrower fourth quarter loss.
A broader gauge of Latin American stocks .MILA00000PUS, on the other hand, dipped 0.5%, underperforming a 0.9%jump in broader EM stocks .MSCIEF as global markets cheered U.S. chipmaker Nvidia’s NVDA.O stellar results.
Elsewhere, JPMorgan saidVenezuela‘s sovereign bonds and those of state oil company PDVSA will return to its highly influential emerging market bond indexes over a three-month period starting from the end of April.
Argentina’s Merval index .MERV jumped 3.5% in its best day in over a month.
Elsewhere in emerging markets, the Turkish lira TRYTOM=D3 was last at 30.9855 after the country’s central bank its key interest rate unchanged at 45%, as expected after last month’s hike.
HIGHLIGHTS
** Brazil’s federal tax revenue up 6.67% in strongest January ever
** Nigeria’s economy grows steadily as oil output rises
Key Latin American stock indexes and currencies at 2015 GMT:
|
Latest |
Daily % change |
|
|
MSCI Emerging Markets .MSCIEF |
1029.23 |
0.84 |
|
MSCI LatAm .MILA00000PUS |
2564.97 |
-0.45 |
|
Brazil Bovespa .BVSP |
130226.09 |
0.15 |
|
Mexico IPC .MXX |
57235.56 |
0.38 |
|
Chile IPSA .SPIPSA |
6237.63 |
-0.22 |
|
Argentina MerVal .MERV |
1076030.02 |
3.513 |
|
Colombia COLCAP .COLCAP |
1278.44 |
0.76 |
|
Currencies |
Latest |
Daily % change |
|
Brazil real BRBY |
4.9564 |
-0.09 |
|
Mexico peso MXN=D2 |
17.1071 |
-0.40 |
|
Chile peso CLP=CL |
978.5 |
-1.08 |
|
Colombia peso COP= |
3927.5 |
-0.25 |
|
Peru sol PEN=PE |
3.7755 |
0.36 |
|
Argentina peso (interbank) ARS=RASL |
838.3000 |
-0.05 |
|
Argentina peso (parallel) ARSB= |
1065 |
4.69 |
Reporting by Shashwat Chauhan in Bengaluru; Editing by Angus MacSwan and Jonathan Oatis