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MSCI LatAm FX up 0.3%, stocks gain 0.67%
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Ukraine international bonds jump on peace deal hopes
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Mexican bi-monthly November inflation above estimates
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Reuters reports US plans new phase of Venezuela operations
(Updates with afternoon trading)
By Purvi Agarwal and Nikhil Sharma
Nov 24 (Reuters) -
Latin American stocks rose on Monday as global risk
sentiment improved on growing expectations of a U.S. interest
rate cut next month, with progress on a Ukraine peace deal also
on the radar, while currencies largely traded cautiously.
The MSCI index tracking Latin American equities
rose 0.67%, while currencies
gained 0.3%. On Friday, both had marked their steepest weekly
declines since July and October, respectively, amid a global
sell-off in risk assets.
Comments by New York Federal Reserve President John Williams
on Friday boosted bets of a December Federal Reserve rate cut,
with optimism around lower rates lifting global market sentiment
on Monday, spilling into Latin America.
Meanwhile, the U.S. and Ukraine sought to narrow gaps in a
peace plan to end the war with Russia after agreeing to modify a
U.S. proposal that Kyiv and its European allies saw as a Kremlin
wish list.
Expectations that a Russia-Ukraine deal was close lifted
appetite for Ukrainian assets, sending its international bonds
soaring on Monday. The 2035 maturity was up
2.1 cents on the dollar. Ukraine-focused stocks also gained,
with London-based miner Ferrexpo (FEEXF) climbing 22.3%.
In Latin America, Brazil's real was 0.2% higher,
while stocks gained 0.3%. The country's central bank
governor expressed dissatisfaction with the progress toward
bringing inflation back to its target, despite keeping the
benchmark rate at a near two-decade high to curb price
pressures.
Separately, the bank sold $2 billion in an auction with a
repurchase agreement.
A panel of Brazil's Supreme Court voted on Monday to keep
Jair Bolsonaro in police custody, after the ex-president was
detained on Saturday.
"There is no change in Bolsonaro's ineligibility situation,
but this event is an escalation of uncertainties related to who
will run through the right wing in the 2026 election," said
Citigroup analysts.
Colombia's peso was flat. Stocks slipped
0.5%, the only outlier among peers. Colombia repurchased over $4
billion in bonds and placed 2 billion euros in global notes, the
finance ministry said on Friday.
Currencies in Mexico and Chile fell 0.35% and
0.16% respectively, although stocks moved higher.
Mexico's annual inflation rate hit 3.61% in the first half
of November, data showed, slightly above expectations of
economists polled by Reuters.
"The Mexican inflation outturn of 3.6% y/y in the first half
of November, coming alongside the contraction in GDP in Q3,
means Banxico will probably opt for another 25bp cut at its next
meeting (despite policymakers' growing cautiousness about the
easing cycle)," Capital Economics analysts said in a note.
Among economic indicators from the region, focus will center
on key employment reports from Mexico, Chile, Colombia, and
Brazil, which are due later in the week.
Meanwhile, a Reuters report said that the U.S. is poised to
launch a new phase of Venezuela-related operations. Venezuela
rejected the plan as "ridiculous".
Markets in Venezuela and Argentina were closed for public
holidays.
Argentina's economy minister said on Friday that officials
did not speak with U.S. banks about a $20 billion rescue
package.
In October, the U.S. Treasury had reached a $20 billion
exchange-rate stabilization agreement with Argentina, to be
paired with a bank-led debt facility for the same amount.
Elsewhere, the International Monetary Fund said Poland must
prioritize curbing the rapid increase in its public debt.
And Israel's central bank delivered an expected 25
basis-point rate cut, its first since January 2024. The shekel
pared some declines to trade 0.1% lower against the
dollar.
Key Latin American stock indexes and currencies:
Stock indexes
Latest Daily % change
MSCI Emerging Markets 1342.79 0.66
MSCI LatAm 2622.39 0.67
Brazil Bovespa 155228.26 0.3
Mexico IPC 62547.37 1.08
Chile IPSA 9802.98 -0.24
Argentina MerVal -- --
Colombia COLCAP 2030.2 -0.51
Currencies Latest Daily % change
Brazil real 5.3933 0.18
Mexico peso 18.5154 -0.35
Chile peso 939.12 -0.16
Colombia peso 3802.5 -0.07
Peru sol 3.3833 0.05
Argentina peso (interbank) -- --
Argentina peso (parallel) -- --
(Reporting by Purvi Agarwal in Bengaluru; Editing by Alexander
Smith and Deepa Babington)
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