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Latam stocks down 0.3%, FX flat
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Argentine authorities probe Milei official over bribery
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Brazil's consumer confidence down to 86.2 in August
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Mexico posts Q2 current account surplus of $206 mln
(Updates with afternoon trading levels)
By Pranav Kashyap and Sukriti Gupta
Aug 25 (Reuters) - Most Latin American currencies and
stocks gave back gains on Monday, following a strong run in the
previous session, while Argentine assets fell amid government
corruption allegations.
Argentina's international dollar bonds fell as corruption
allegations threatened to embroil figures close to President
Javier Milei, with the 2038 issue down as much as over 4 cents
in the session. It was last down 2.4 cents on the dollar.
Stocks in Buenos Aires slumped 3.6% - hitting an
over one-month low, while the peso lost 2.7%, set for
its worst day in nearly a month.
Argentine authorities conducted raids across multiple
properties in connection with an alleged kickback scheme that
could implicate senior government officials, according to local
media reports.
The controversy comes at a sensitive moment for Milei, who
is already grappling with legislative setbacks in Congress with
midterm elections looming in October.
The Mexican peso nudged 0.5% lower, and stocks
fell 0.8%.
Mexico's economy posted a current
account surplus
of $206 million during the second quarter, reversing a
deficit of $911 million in the same period last year, the
central bank said.
Currencies in Chile and Colombia slipped
0.7% and 0.3% respectively, as the dollar index bounced
back on the day, up 0.7%.
Powell, on Friday, cracked the door open to a September rate
cut that pinned the dollar at a four-week low as markets price
in roughly 52 bps of easing by year-end, according to LSEG data.
Expectations of lower U.S. rates have weighed on the
dollar, already down nearly 10% this year. It could revive its
role as a preferred funding currency for carry trades in
countries with historically high interest rates like Brazil.
"Jerome Powell's "all clear" signal for rate cuts turned
a down week for stocks into a gain, but now the discussion will
likely turn to how aggressive the Fed may be," said Chris
Larkin, managing director, trading and investing, E*TRADE at
Morgan Stanley.
On the flip side, Brazil's real rose 0.2%, an
outlier, while stocks hit an over one-month high, last
up 0.1%.
Data showed Brazilian
consumer confidence fell again in August in another
indication that the economy was losing steam under the weight of
the 15% Selic rate.
However, Brazilian private economists polled weekly by the
central bank lowered their forecast for 2027 inflation, ending a
six-month plateau.
MSCI's gauge tracking Latin American currencies
was flat after registering its biggest one-day
rise in four months on Friday. It hit a record high earlier in
the session.
A similar gauge for regional equities
lost 0.3% after logging its best day in over five months on
Friday.
Stocks in Bogota slipped 0.3%, while ones in Chile
advanced 0.5%.
Key Latin American stock indexes and currencies:
MSCI Emerging Markets 1283.9 1.37
MSCI LatAm 2366.49 -0.33
Brazil Bovespa 138097.76 0.09
Mexico IPC 58739.56 -0.82
Chile IPSA 8897.82 0.49
Argentina Merval 2025190.6 -3.84
Colombia COLCAP 1852.77 -0.31
Brazil real 5.4127 0.17
Mexico peso 18.682 -0.54
Chile peso 964.47 -0.74
Colombia peso 4025.35 -0.27
Peru sol 3.5086 -0.6
Argentina peso (interbank) 1356 -2.7
Argentina peso (parallel) 1345 -3.71
(Reporting by Pranav Kashyap, Sukriti Gupta, and Purvi Agarwal
in Bangalore; Editing by Andrea Ricci and Vijay Kishore)
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