Most Latam FX steady ahead of data-heavy week
Updated at 1422 GMT
Azul reaches deal with bondholders for additional financing
Mexico's Cemex lowers core earnings guidance for Q3
Colombia's govt. expands debt issuance cap by over $2 bln
By Johann M Cherian
Oct 28 (Reuters) -Currencies of most Latin American economies were steady on Monday as investors awaited a string of country-specific data reports through the week, while Colombia's peso hit levels not seen in more than a year, tracking weak crude prices.
Brazil's real BRL= edged up 0.10% to 5.70 against the dollar, tracking higher iron ore prices. IRN/
Investors will keep a close eye on September budget data due on Thursday. Concerns around the country's fiscal stability had sparked a sell-off in the real earlier in the year, making it one among currencies with the steepest declines in the region.
MSCI's gauge for Latin American currencies .MILA00000CUS was unchanged against a weakening dollar =USD. However, the greenback was on track for its sharpest monthly rise since April 2022 as markets dialed back expectations for another 50 basis-point reduction by the Federal Reserve in November.
Markets also braced for the possibility of a second Donald Trump presidency, with real-money prediction market platform PredictIt suggesting the Republican candidate has an edge over Democrat Kamala Harris.
Trump's policies around trade, security and immigration are expected to undermine assets in Latin America, according to analysts.
Oil exporter Colombia's peso COP= weakened 0.4% to 4,343 to the dollar, tracking a near 6% slump in crude oil prices as geopolitical tensions in the Middle East appeared to have subsided briefly. O/R
Investors also priced in a 75 bps interest rate cut by the local central bank, due on Thursday.
Goldman Sachs analysts expect a 50 bps rate cut. "We think that the recent inflation and activity prints, a weaker currency tracking at its lowest level in a year, and recent market-unsettling domestic developments are consistent with a moderate 50 bps cut," they said.
Yields on sovereign bonds maturing in 2032 ticked up 8 bps. The domestic government raised its cap for issuing domestic public debt securities to cover planned spending for this year.
Fellow crude producer Mexico's peso MXN= slipped 0.36% ahead of third-quarter gross domestic product data due later in the week.
Copper producer Chile's peso CLP= rebounded 0.46% after two straight days of losses, while Peru's sol PEN= was flat.
MSCI's gauge for regional equities .MILA00000PUS edged up 0.5%, with Brazil's Bovespa .BVSP up 0.9%.
Azul AZUL.N shot up 11% after the carrier reached a deal with an existing group of bondholders to obtain additional financing as part of restructuring that it expects to ease market concerns about its debt load.
Mexico's main stock index .MXX was flat, with Cemex CEMEXCPO.MX losing 9.9% after the cement producer reported a 9% year-on-year drop in third-quarter core earnings.
Elsewhere, Uruguay's new peso URU= was little changed. The country is heading for a tight presidential election run-off next month.
Ecuador's national assembly approved a bill that seeks to expand direct private investment in the electricity sector against the backdrop of a severe energy crisis.
Latin American market prices from Reuters | ||
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1138.13 | 0.29 |
MSCI LatAm .MILA00000PUS | 2178.57 | 0.52 |
Brazil Bovespa .BVSP | 131050.09 | 0.89 |
Mexico IPC .MXX | 51753.41 | -0.06 |
Chile IPSA .SPIPSA | 6763.14 | 0.13 |
Argentina Merval .MERV | 1893809.56 | 1.12 |
Colombia COLCAP .COLCAP | 1337.43 | 0.22 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.7023 | 0.09 |
Mexico peso MXN= | 20.0225 | -0.36 |
Chile peso CLP= | 944.2 | 0.46 |
Colombia peso COP= | 4343 | -0.39 |
Peru sol PEN= | 3.7649 | 0.08 |
Argentina peso (interbank) ARS=RASL | 987.5 | -0.20 |
Argentina peso (parallel) ARSB= | 1200.0 | 2.04 |
Reporting by Johann M Cherian in Bengaluru; Editing by Jan Harvey
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