* Brazil August retail sales beat expectations, but pressures remain * Prices fall after disappointing third-quarter iron ore output * Latin American stocks fall 1.4%, currency down 0.8% By Johann M Cherian 10 May 18 (Reuters) – Stocks and currencies fell as investors around the world became cautious due to the tense geopolitical environment in the Middle East, which weakened risk sentiment across much of Latin America. By 1416 GMT, MSCI’s regional currency index was down 0.8% as the dollar strengthened. The currencies of Brazil and Mexico, the region’s largest economies, fell by 0.3% and 1.0%, respectively. Separately, data showed Brazil’s retail sales beat market expectations in August but recorded a small monthly decline, with the sector still under pressure from high borrowing costs. It suggests that it is being received. “We expect the adjustment in demand in the second half of this year to be much sharper than the recent consensus,” said Felipe Camargo, senior emerging economist at Oxford Economics. “However, the drag from fiscal and monetary policy has not yet peaked, while the boost from the agricultural sector and the mini-commodity boom is starting to wane. “The balance is out of balance. It is not getting worse, as it already contains the factors that prompted the latest revision to the outlook for consumer prices. On the bright side, the outlook is on the back of better-than-expected economic indicators from China,” he said. Leading copper producer Peru’s Sol rose 0.1% as prices for the red metal rose, as investors assessed the broader impact of the Israel-Hamas conflict while concerns over U.S. interest rates persisted. Currencies and stocks have been range-bound for the past few times, with Brazil’s Bovespa and Mexico’s benchmark indexes down 0.8% and 0.6%, respectively, and individual stocks with Brazilian mining companies suffering a decline in iron ore production in the third quarter due to production stagnation. Vale SA fell 2.8% after announcing a 3.9% annual decline in stone production at its key mine. Brokerage firm BofA Global Research upgraded the Chilean lithium producer from “neutral” to “underperform.” SQM fell 1.8% following the downgrade. Also in the region, the Argentine peso traded at 940 pesos to the dollar in parallel trading after the central bank said it had cleared a currency swap line totaling $6.5 billion that China has free access to. This is part of a broader agreement the country is using to protect disputed areas. Peso. Elsewhere in emerging markets, Russia’s parliament quickly passed a bill that would change Russia’s legal position on nuclear tests, amid rising tensions with the West. Major Latin American stock indexes and currencies at 1422 GMT: Latin American market prices latest daily YTD% YTD% change from Reuters MSCI Emerging Markets 943.70 -0.79 -0.51 MSCI LATAM 2238 -1.27 7.44 BRAZIL BOVESPA 0.79 1.68 Chile IPSA 5817.97 -1.24 10.67 Argentina MerVal 831041.05 0.893 311.23 Colombia COLCAP 1123.14 0.35 -12.64 Currency Latest Daily % YTD % Change Brazilian Real 5.0512 -0.33 -34.41 Mexican Peso 18.1873 -0.98 8.31 Chilean Peso 934.9 0.10 -34.26 Colombian Peso 4224.2 – 0.81 -29.41 Peru・Sol 3.8565 -0.59 -16.06 Argentine Peso 350.0000 0.03 -94.69 (Interbank) Argentine Peso 940 4.79 -97.95 (Parallel) (Reporting by Johann M Cherian in Bengaluru; Editing by Jonathan Oatis)
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