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LatAm stocks up 1.7%, FX rises 0.3%
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Bolivia seeks as much as $3.3 billion in IMF financing
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US job growth accelerates in January, unemployment falls
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Brazil's benchmark stock index hits all-time high
(Updates to mid-session trading)
By Pranav Kashyap and Ragini Mathur
Feb 11 (Reuters) - Most Latin American currencies and
stocks were broadly higher on Wednesday ?as investors digested a
hot U.S. jobs report and pushed back expectations ?for a Federal
Reserve rate cut.
The MSCI index for Latin American equities
jumped 1.7%, hitting a fresh record high, while a similar
currency index rose 0.3% ?to reach an all-time
peak.
The U.S. dollar, which had strengthened initially
after nonfarm payrolls came in well above ?forecasts and the
unemployment rate edged lower in January, retreated 0.1% on the
day.
"Job ?growth appears strong overall, but ?it's mainly
concentrated in just a couple of sectors," said Brendan McKenna,
an economist at Wells Fargo.
"If the Federal Reserve delays interest rate cuts, ?Latin
American currencies could face pressure. However, it's still
unclear which ?direction the Fed is heading."
Heavyweight Brazilian stocks surged 2%, also hitting
an all-time high, buoyed by pulp maker Suzano's 11.4%
jump after it posted better-than-expected earnings for the
fourth quarter.
Brazil's currency ?rose 0.1%, extending its advance to
a fourth straight ?session, its longest ?winning streak since
early November.
In Mexico, the peso was little changed,
underperforming peers. Meanwhile Mexican stocks rose
0.3%.
Uncertainty mounted after Bloomberg News reported that
President Donald Trump has privately floated the idea of pulling
out ?of the North American trade pact, a move that could
complicate already-sensitive negotiations between the U.S.,
Canada and ?Mexico.
The Mexican peso also took a hit after Bank of Mexico Deputy
Governor Jonathan Heath warned inflation was unlikely to return
to the central bank's 3% target by the second quarter of next
year. Recent data, meanwhile, has pointed to an economy heating
up, backing the central bank's decision to keep rates on hold.
More broadly, Latin ?American stocks have ?been beating both
the S&P 500 and Europe's STOXX so far this year,
and ?analysts see room for the rally to run. A rotation away from
richly valued U.S. tech, paired with a ?renewed appetite for
cheaper and overlooked corners of markets, has put the region in
focus.
Elsewhere, the Colombian peso has more ground to make
up, as year-to-date, it continues to lag its peers with
political risk creeping into the picture. It was up 0.3% on the
day.
The country is expected to vote as many as three times
starting in March to elect new legislators and a new president.
Stocks, buoyed by hopes of a more
investor-friendly administration in 2025, were up about 15%
year-to-date.
Meanwhile, Bolivia's international ?dollar bond
gained after Bloomberg News reported the
country is in talks with the IMF on a program that could unlock
up to $3.3 billion in financing.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change
MSCI Emerging Markets 1566.8 1.1
MSCI LatAm 3270.42 1.67
Brazil Bovespa 189804.47 2.08
Mexico ?IPC 71491.92 0.31
Chile IPSA 11217.82 1.89
Argentina MerVal 3019065.44 -1.36
Colombia COLCAP 2375.02 -1.78
Currencies Latest Daily % change
Brazil real 5.1859 0.12
Mexico peso 17.1755 0.08
Chile peso 852.82 0.43
Colombia ?peso 3652.5 0.3
Peru sol 3.3538 0.06
Argentina peso (interbank) 1,403.0 -
Argentina peso (parallel) 1,415.0 0.7
(Reporting by Pranav Kashyap and Ragini Mathur in Bengaluru
Editing ?by Nick Zieminski and Vijay Kishore)
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