ReutersReuters

Brazilian real, stocks lead gains among Latin American peers

נקודות מפתח:
  • Latam stocks up 2.5%, FX gains 1.3%
  • Brazil stocks set to rally 13% by end-2023 - poll
  • Chile unemployment rate hits 8.0% in quarter through October

Brazil's resource-heavy main stock index and real led gains among Latin American peers on Tuesday, on boost from a subdued dollar and as prices of their exporting commodities rose on hopes of easing COVID-19 curbs in China post the rare protests.

The MSCI's index for Latin American stocks (.MILA00000PUS) and currencies (.MILA00000CUS) jumped 2.5% and 1.3%, respectively.

Brazil's Bovespa stock index IBOV gained, on a boost from a 5% climb in shares of both mining giant Vale SA VALE3 and state-run oil company Petrobras PETR3.

The real USDBRL rallied 1.5% as prices of its top export iron ore jumped on top steel producer China's moves to ramp up support for struggling property developers.

The Bovespa has risen 6.5% so far this year, outperforming the 22.6% drop in the broader emerging market EFS.

"The case for Brazil outperformance is still intact, but that near-term volatility should be expected," wrote Lawrence Brainard, chief emerging markets economist at TS Lombard in a note, adding that markets have misread Lula's policy priorities and strategy.

"While the extent to which Lula will be successful in pushing through major economic reform is not yet clear, there is widespread support from business and the broader public for addressing the festering fiscal mess."

Reuters reported Brazilian President-elect Luiz Inacio Lula da Silva is expected to tap former Sao Paulo Mayor in coming days to be his finance minister.

Lula's silence on the decision has rattled Brazilian markets this month, with investors also worrying about Lula aiming to prioritize social spending over fiscal responsibility that could ultimately force a monetary policy shift.

Emerging market central banks, especially Brazil, had started tightening their monetary policies way ahead of their developed peers. Still, inflation continues to run ahead of their target expectations.

Mexico's peso USDMXN and Colombia's peso USDCOP rose 0.4% and 0.5%, respectively, against the dollar, with stronger crude prices boosting the oil producer's currency.

Meanwhile, sales of Argentina's 2021/22 hit a two-month high after the government instated a preferential exchange rate for soy exports.

Key Latin American stock indexes and currencies at 1929 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets EFS

953.96

2.49

MSCI LatAm (.MILA00000PUS)

2197.96

2.54

Brazil Bovespa IBOV

111696.62

2.68

Mexico IPC ME

50566.31

-1.01

Chile IPSA SP_IPSA

5246.94

0.75

Argentina MerVal IMV

166455.19

1.325

Colombia COLCAP (.COLCAP)

1254.41

1.08

Currencies

Latest

Daily % change

Brazil real (BRBY)

5.2836

1.52

Mexico peso USDMXN

19.2219

0.38

Chile peso USDCLP

899

1.50

Colombia peso USDCOP

4806.38

0.50

Peru sol USDPEN

3.849

-0.43

Argentina peso (interbank) USDARS

166.9600

-0.21

Argentina peso (parallel) (ARSB=)

311

2.25

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