LatAm assets mixed ahead of US inflation; Middle East in focus

By Niket Nishant and Utkarsh Hathi

Aug 10 (Reuters) - Latin ‌American assets were mixed ​on Monday ​as investors looked ahead to U.S. inflation data for clues on Federal Reserve's monetary policy outlook, while persistent uncertainty in the Middle East sent oil prices higher.

MSCI's index tracking Latin American equities fell ‌0.23%, and heading for seventh straight session of losses, while the corresponding currencies gauge edged 0.21% ⁠lower.

Mexican stocks fell 0.59% and were the biggest laggards in the region, while the peso dipped 0.1%.

The European Union imposed tariffs on terephthalic acid, ‌a raw material used to make ‌a common sort of plastic known as PET, made in South Korea and Mexico to protect producers in Belgium, Poland and Spain.

Colombian equities rebounded from early session losses triggered by a major earthquake on Monday that killed more ​than 100 people and caused widespread damage. Several dollar-denominated bonds also traded lower.

The peso, however, rose 0.6% against a stronger dollar and was one of the biggest gainers among regional currencies.

The earthquake comes at a delicate time for ⁠the country, which is entering a new phase under right-wing President Abelardo De La Espriella.

De La Espriella, sworn in on Friday, pledged a fight against drug ​trafficking as well as austerity measures to restore confidence in the economy.

President Donald Trump's administration is also planning to provide $1 billion in security assistance to De La Espriella's government, the ​U.S. State Department said.

"That push marks a sharp break from the ‌turbulent relationship under outgoing President Gustavo Petro, with whom Trump repeatedly clashed," wrote Jason Marczak and Bruce Mac Master, policy experts at Atlantic Council, a Washington, DC-based think tank.

"It also gives ⁠both administrations an opportunity to advance the agenda they have started to build during the transition," they added, noting that collaboration between the two countries could expand opportunities for U.S. business and boost Colombian production.

Elsewhere, Brazil's Bovespa declined 0.1% and the real fell 0.6%.

U.S. INFLATION AND ⁠MIDDLE EAST DEVELOPMENTS IN FOCUS

Risks of inflation very much remain in focus as oil prices rose xx% after Tehran reiterated that it would ​not reopen the Strait of Hormuz until Washington met certain demands,while President Donald Trump demanded compensation in response.

The muted moves in Latin America stood in stark contrast to EM peers in Asia, where equities rose despite higher oil prices as investors seized on a weak ‌U.S. jobs report last week.

The soft print for July payrolls in U.S. last week lowered the odds of an interest rate hike by the Federal Reserve, boosting risk appetite.

"We think ‌that it would take an unlikely significant upside surprise to tip the balance of FOMC voters towards a hike at the September ⁠Fed meeting," said Enrique Díaz-Alvarez, chief economist at ‌Ebury.

Equities in Argentina gained the most, ​rising 1.1%.

Key Latin American stock indexes and currencies at 18:59 GMT

Stock indexes Latest Daily % change

MSCI Emerging Markets 1669.09 0.68

MSCI LatAm 3034.73 -0.23

Brazil Bovespa 172302.92 -0.12

Mexico IPC 66538.65 -0.59

Chile IPSA 11265.2 0.08

Argentina MerVal 3120550.36 1.1

Colombia COLCAP 2366.46 0.68

Currencies Latest Daily

%

change

Brazil real 5.1129 -0.62

Mexico peso 17.1383 -0.1

Chile peso 915.38 -0.37

Colombia peso 3135.71 0.55

Peru sol 3.3765 0.18

Argentina 1,498.0 0.10

peso

(interbank)

Argentina 1,515.0 0.66

peso

(parallel)

(Reporting by Niket Nishant and Utkarsh Hathi in BengaluruEditing by ‌Nick Zieminski)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• FOMC minutes from July 28-29th meeting
• US judge strikes down policy suspending immigrant visa processing for 75 nations
• Pentagon fires US military newspaper leadership