EMERGING MARKETS-Latam assets slip as geopolitical tensions, Fed worries weigh

BY Reuters | ECONOMIC | 04/15/24 11:06 AM EDT

      Brazil to rollover $15.5 bln in swaps maturing in July

      Chile's Antofagasta (ANFGF) expects higher 2024 copper prices

      Latam currencies and stocks both down 0.4%

    By Bansari Mayur Kamdar
       April 15 (Reuters) - Currencies and stocks in Latin
America tracked a cautious global mood on Monday, as dwindling
Federal Reserve rate cut hopes weighed and investors assessed
the impact of rising tensions in the Middle East after Iran's
missile and drone attack on Israel.
    The MSCI indexes for Latam currencies and
stocks fell 0.4% each by 1430 GMT.
    The currency index ended Friday with its worst weekly
performance since October as the U.S. dollar soared on concerns
the Fed will keep rates higher for longer.
    Leading regional losses early in the session, top copper
producer Chile's peso shed 1.5% against the dollar.
    Investors awaited minutes from the Chilean central bank
meeting expected on Wednesday after its 75 basis points interest
rate cut earlier this month.
    "We will be particularly attentive to a discussion among
board members on external conditions and the relative stance of
monetary policy in Chile against other central banks,
particularly the Fed," Goldman Sachs economists said in a note.
    Meanwhile, growing demand for copper along with supply
constrictions could push prices higher than last year in 2024,
the head of Chilean miner Antofagasta (ANFGF) said.
    Brazil's real eased 1.1% against the greenback.
    In focus will be Brazil's central bank which said late on
Friday it would hold auctions starting on Monday to roll over
$15.5 billion in traditional currency swaps expiring on July 1.
    Stocks in Brazil inched up, boosted by an 8.6% jump
in shares of BRF after ratings upgrades from JPMorgan
and Goldman Sachs.
    Bucking weakness in regional peers, Mexico's peso
edged up against the dollar, while the Colombian peso
dipped 0.9%.
    In Argentina, the S&P Merval index dipped 0.6%
following its 2% jump on Friday after data showed inflation in
March slowed to 11% month-on-month.
    Elsewhere in emerging markets, Israel's shekel jumped
0.5% against the dollar in what market players said was a
"relief rally" as Israel had not hit back at Iran so far.
    Amundi, Europe's largest asset manager, said that equities
in India and emerging markets outside China will offer the most
appealing returns in the coming 10 years.
    British fund manager Ashmore reported a drop in assets under
management owing to choppy risk appetite and mixed results from
emerging markets.
    Ghana failed to strike a deal with two bondholder groups to
restructure $13 billion of international bonds.

    Key Latin American stock indexes and currencies at 1430 GMT:

     Stock indexes               Latest    Daily % change
 MSCI Emerging Markets            1031.00           -1.03

 MSCI LatAm                       2453.24           -0.44

 Brazil Bovespa                 125995.29            0.04

 Mexico IPC                      56584.17            0.03

 Chile IPSA                       6553.99           -0.15

 Argentina MerVal              1236886.34          -0.614

 Colombia COLCAP                  1391.50            0.05

         Currencies              Latest    Daily % change
 Brazil real                       5.1771           -1.09

 Mexico peso                      16.6950           -0.45

 Chile peso                         979.9           -1.39

 Colombia peso                    3897.26           -1.11
 Peru sol                          3.7137           -0.56

 Argentina peso (interbank)      868.0000           -0.12

 Argentina peso (parallel)            980            2.55

 (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Alexander Smith)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.