*
Stocks down 0.2%, currencies fall 0.25%
*
Brazil's 12-month inflation slows in November
*
Chile heads for presidential run-off on Sunday
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Mexico's economy resilient as domestic risks rise, cenbank
says
(Updates with afternoon trading, adds market details)
By Niket Nishant and Nikhil Sharma
Dec 10 (Reuters) -
Latin American assets edged down on Wednesday after the U.S.
Federal Reserve, which cut
interest rates
, signaled that it will likely pause further reductions in
borrowing costs, while Brazil's policy decision was on the
radar.
The MSCI index of Latin American stocks slid
0.2%, while the currencies gauge lost 0.25%.
New projections issued after the U.S. central bank's
two-day meeting showed the median policymaker sees just one
quarter-percentage-point cut in 2026, the same outlook as in
September.
"When you look further down the road there is a lot of
uncertainty. And when we move past today's rate cut and into
2026, the tailwind from rate cuts is a lot less reliable. That
could be a problem," said Chris Grisanti, chief market
strategist, MAI Capital Management.
In Brazil, investors awaited the central bank's final
policy decision of 2025, where it is widely expected to keep
rates on hold.
Data on Wednesday showed Brazil's 12-month inflation
slowed in November to its lowest level in more than a year.
The Bovespa index rose 0.8%, steadying a day after
being rattled by the presidential bid of Senator Flavio
Bolsonaro, the eldest son of former President Jair Bolsonaro,
who faces a 27-year prison sentence.
On Wednesday, lawmakers
voted to shorten the prison sentence
of former President, although the bill is likely to face
resistance from senators, the Supreme Court and leftist
President Luiz Inacio Lula da Silva.
The real fell 0.6% against the dollar, marking a
second consecutive day of losses.
In Argentina, stocks gained 0.9% while the peso
rose 0.4%. The newly elected Congress will begin a
period of special legislative sessions in which President Javier
Milei intends to push a series of reforms he has said are
necessary to boost the country's economy.
The country is also looking to issue bonds worth around $1
billion, targeting a coupon rate below 9%. Most of its
dollar-denominated bonds were trading slightly higher.
Colombian stocks rose 0.6% and the local peso
added 0.61%.
Separately, Reuters reported that the country's guerrilla
group, the National Liberation Army, is willing to resume peace
negotiations with the current government, or with whichever new
government is elected next year if commitments previously agreed
upon at stymied peace talks are honored.
Chilean equities were down 0.1%. Far-right
candidate Jose Antonio Kast is widely expected to win Chile's
presidential run-off on Sunday and become the country's most
conservative leader since its military dictatorship. The peso
rose 0.55% against the greenback.
"A Kast victory would reinforce the recent surge of right
and far-right political actors in Latin America," wrote Ken
Roberts, a professor of government with a specialization in
Latin American politics at Cornell University.
"But it would also continue a much longer pattern of
volatile anti-incumbent voting in Latin America's turbulent
democratic waters."
Separately, Mexico's lower house approved tariffs of up to 50%
from next year on imports from China and several other Asian
countries. Stocks lost 0.34% and currency was
largely unchanged.
Mexico's economy is
solid and resilient
, its central bank said in the Latin American nation's
financial stability report, even as domestic financial risks
increased.
Meanwhile, data from a banking trade group
showed
that foreign investors sold emerging market stocks in
November at the fastest pace in eight months, turning overall
portfolio flows negative for the first time since April.
Key Latin American stock indexes and currencies:
Stock indexes
Latest Daily % change
MSCI Emerging Markets 1385.23 0.46
MSCI LatAm 2689.41 -0.21
Brazil Bovespa 159209.93 0.78
Mexico IPC 63480.99 -0.34
Chile IPSA 10170.37 -0.09
Argentina MerVal 3013646.79 0.89
Colombia COLCAP 2113.07 -0.49
Currencies Latest Daily % change
Brazil real 5.4638 -0.57
Mexico peso 18.169 0.06
Chile peso 922.4 0.35
Colombia peso 3831.56 0.61
Peru sol 3.3581 0.11
Argentina peso 1,437.5 0.38
(interbank)
Argentina peso (parallel) 1,430.0 1.04
(Reporting by Niket Nishant in Bengaluru; Editing by Sharon
Singleton and Nick Zieminski)
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