* Stocks advance 1.3%, FX rises 0.9%
* Equities may have room to grow, BofA says
* Peruvian Prime Minister resigns
(Updates with late afternoon trading)
By Twesha Dikshit and Niket Nishant
March 17 (Reuters) - Latin American stocks and
currencies climbed on Tuesday, as markets awaited interest-rate
decisions in Brazil and the U.S., while continuing to track the
evolving situation in the Middle East.
Regional assets have kicked off the week on a calmer note
despite lingering concerns about disruptions in the Strait of
Hormuz, a vital artery for global oil flows, and little sign of
easing in the U.S.-Israel war against Iran.
Israel said it had killed Iran's security chief, while a
senior Iranian official said the new supreme leader had rejected
de-escalation offers, demanding that Israel and the U.S. be
"brought to their knees".
Brent crude futures were up more than 3%, with
Iran's attacks on energy infrastructure in the region adding to
supply concerns.
Within the emerging market universe, LatAm remained less
vulnerable, with analysts highlighting that the region's
distance from the conflict zone and its oil-exporting economies
provide some security, compared to Asia and emerging Europe,
which rely heavily on energy imports.
MSCI's gauge of Latin American equities
advanced 1.3%, while a similar gauge for currencies
rose 0.9%.
"Many LatAm stocks still trade below their usual
relationship versus global industry peers and may have room to
catch up if the global rotation towards EM continues," BofA
Securities analysts said in a note.
Several central bank meetings will be in the spotlight this
week, including those in Brazil and the U.S., as investors look
to see how policymakers navigate interest-rate decisions amid
expectations of a rise in inflation due to the oil surge.
Macquarie analysts said Brazil's Copom might cut the target
rate this week by 25 basis points or not cut at all, a change
from their initial expectations of a 50-bps cut.
"We still expect that some easing will take place in H1 2026
and H2 2026. That's because the administration of President Luiz
Inacio 'Lula' da Silva has moved proactively to limit the
domestic fuel price pass-through, as it remains wary of the
inflationary and political consequences of higher motor fuel
prices," they said in a note.
STOCKS HIGHER ACROSS THE BOARD
Brazil's benchmark index gained 0.5%, while the real
firmed 0.6% against the greenback. The central bank's
interest rate decision this week will take place with two empty
seats on its committee, people familiar with the matter said,
due to tensions between the government and Senate leaders.
Mexican equities added 0.7%. Economy minister Marcelo
Ebrard will meet U.S. Trade Representative Jamieson Greer on
Wednesday to formally start the United States-Mexico-Canada
(USMCA) trade deal review, Ebrard's office said.
Argentina's equity index rose 2.1%, while Chile's
edged 0.3% higher.
Peruvian equities were 0.2% higher, while
the sol was flat. Prime Minister Denisse Miralles
resigned just weeks ahead of general elections scheduled for
April 12.
Meanwhile, Russia expressed unwavering solidarity with Cuba
after U.S. President Donald Trump said he expected to have the
honour of "taking Cuba."
Elsewhere in EM, bourses in Hungary, Poland
and Turkey added between 1.5% and 2%. Asian markets
gained on AI-driven optimism, with indexes in Korea and
Taiwan closing up around 1.5% each.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change
MSCI Emerging 1497.11 1.2
Markets
MSCI LatAm 3021.06 1.25
Brazil Bovespa 180764.37 0.49
Mexico IPC 66088.74 0.67
Chile IPSA 10618.5 0.34
Argentina 2660043.4 2.06
Merval 7
Colombia 2171.25 -0.65
COLCAP
Currencies Latest Daily % change
Brazil real 5.1982 0.63
Mexico peso 17.6645 0.05
Chile peso 905.76 0.38
Colombia peso 3689.31 0.01
Peru sol 3.4168 0.06
Argentina peso 1395.5 0.11
(interbank)
Argentina peso 1415 0.71
(parallel)
(Reporting by Twesha Dikshit and Niket Nishant in Bengaluru;
Editing by Louise Heavens and Shilpi Majumdar)
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