Brazil’s real shines on commodities’ boost, Mexican peso under pressure

* Latam equities index up 0.6% * Real firms after six-day run of losses * Mexican peso sees steep losses By Sruthi Shankar and Shashwat Chauhan June 6 – Brazil’s real outpaced its Latin American peers on Thursday, tracking rising commodity prices, while Mexico’s peso resumed its recent string of losses following Sunday’s elections. The real jumped 0.8%, on track to snap a six-day losing streak as prices of iron ore and crude oil, some of the country’s top exports, advanced. The local stock index also gained 1.1%, while the MSCI index of Latam stocks climbed 0.6%, its second straight day of gains after hitting more than seven-month lows earlier this week. The Mexican peso slipped 2.2% in volatile trade after a Sunday landslide election victory for the ruling MORENA party and its coalition raised concerns among investors that it could allow them to pass constitutional reforms unopposed. Mexico’s equity markets, however, gained 0.7%, recouping some of the losses driven by the election surprise. Other currencies in the region including Chile’s peso , Colombia’s peso and the Peruvian sol were range-bound, while the dollar index remained under pressure. Equities in Chile, Peru and Colombia rose between 0.1% and 0.4%. Focus now shifts to the monthly U.S. jobs report for May, due on Friday, with financial markets pricing in a first Federal Reserve rate cut in September and traders becoming increasingly confident of a second rate cut in December. “Markets will likely react more to a weaker print than strong data, but data likely needs to be much weaker given that investor expectations have declined,” TD Securities strategists noted. Meanwhile, emerging markets attracted foreign portfolio inflows for a seventh straight month in May thanks to investors pouring money into bonds, but persistently high U.S. interest rates are dimming the outlook, a report from the Institute of International Finance showed. HIGHLIGHTS ** Brazilian central bank officials warn of rising inflation expectations ** Chile’s Codelco targeting 2030 production for Maricunga lithium site -document ** Colombia to freeze some spending, hoping for better tax revenue Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1073.56 1.01 MSCI LatAm 2306.68 0.67 Brazil Bovespa 122825.57 1.17 Mexico IPC 54815.91 0.75 Chile IPSA 6676.21 0.31 Argentina MerVal 1504279.20 -4.232 Colombia COLC 1407.59 0.08 Currencies Latest Daily % change Brazil real 5.2501 0.88 Mexico peso 17.8390 -1.94 Chile peso 907.8 0.06 Colombia peso 3937.4 -0.25 Peru sol 3.7444 -0.21 Argentina peso 898.0000 0.11 Argentina peso 1230 1.63

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Published: 07 Jun 2024, 01:31 AM IST

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