EMERGING MARKETS-Latam currencies, stocks slip as Middle East tensions, Fed worries weigh

BY Reuters | ECONOMIC | 04/15/24 04:43 PM EDT

        *
      Geopolitical worries in Middle East hit EM assets


        *
      Brazil relaxes 2025 fiscal targets


        *
      Chile's Antofagasta expects higher 2024 copper prices


        *
      Latam currencies down 0.5%, stocks fall 1.3%



 (Updated at 3:45 pm ET/1945 GMT)
    By Bansari Mayur Kamdar and Lisa Pauline Mattackal
       April 15 (Reuters) - Currencies and stocks in Latin
America fell steeply amid a cautious global mood on Monday, as
dwindling Federal Reserve rate cut hopes weighed and investors
assessed the impact of rising geopolitical tensions in the
Middle East after Iran's missile and drone attack on Israel.
    The MSCI indexes for Latam currencies fell
0.5%, set for its lowest close since February. A basket of
regional stocks dropped 1.3%, on track for a
fourth consecutive session in the red.
    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.
        Investors were cautious after
    Iran
     launched a missile and drone attack against Israel over the
weekend in retaliation for a suspected attack on its embassy.
However, calls for restraint from Israel helped soothe some
tensions in the region.

    "We continue to believe a broader regional conflict is not
imminent," analysts at Wells Fargo wrote, adding the escalation
in Iran had not changed their long term investment views.
        "Sentiment and oil prices are the most likely channels
through which the global economy, monetary policy and financial
markets could be interrupted."

    The currencies of Brazil, Colombia and Chile
 each slipped about 1.3% versus the dollar, which
touched its highest in over five months.
        Brazil's government set a
    fisca
    l target of zero primary deficit for 2025, Finance Minister
Fernando Haddad said, relaxing the previous target of a 2025
surplus of 0.5% of gross domestic product.

    The real fell after the announcement, and stocks in Brazil
 slipped 0.4%.
    Elsewhere, shares of Brazil's BRF leapt over 10%
to their highest since 2022 after ratings upgrades from JPMorgan
and Goldman Sachs.
        Bank of
    Mexico
     Deputy Governor Jonathan Heath said the country's inflation
in the country was showing signs of persistence and that
difficult terrain lay ahead for policymakers.

        Mexico's peso slipped 0.6% against the dollar and stocks
 lost 0.8%.

    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.
        Peru's sol lost 0.8%, despite data showing the
    economy
     notched its best month of growth in nearly two years.


    Ghana failed to strike a deal with two bondholder groups to
restructure $13 billion of international bonds.

    HIGHLIGHTS
        **
    Amundi says Indian equities, ex-China EM to offer the
appealing returns
    ** Ashmore reports drop in AUM
        **
    U.S. extends license
     protecting Citgo from creditors through mid-August

        ** US says will not renew easing of
    Venezuela
     oil sanctions unless progress made on elections


    Key Latin American stock indexes and currencies at 1945 GMT:

                              Latest    Daily %
                                         change
 MSCI Emerging Markets         1029.90     -1.13

 MSCI LatAm                    2431.28     -1.33

 Brazil Bovespa              125351.83     -0.47

 Mexico IPC                   56132.36     -0.77

 Chile IPSA                    6485.76     -1.19

 Argentina MerVal           1196300.74    -3.875

 Colombia COLCAP               1378.94     -0.85


       Currencies             Latest    Daily %
                                         change
 Brazil real                    5.1868     -1.27

 Mexico peso                   16.7146     -0.57

 Chile peso                      978.9     -1.29

 Colombia peso                 3905.81     -1.32
 Peru sol                       3.7238     -0.83

 Argentina peso               868.0000     -0.12
 (interbank)

 Argentina peso                    995      1.01
 (parallel)



 (Reporting by Bansari Mayur Kamdar and Lisa Mattackal in
Bengaluru; Editing by Alexander Smith and Marguerita Choy)

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.

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