Brazil puts LatAm equities on track for biggest weekly gain since 2020
EWZ•Latin American stocks were set for their biggest weekly gain in nearly six years, led by a rally in Brazilian equities after polls showed Flavio Bolsonaro leading the presidential race. The MSCI LatAm index rose 1.2% Friday, while Brazil’s Bovespa gained 1.1%.
1. Brazil leads regional gains
Latin American stocks were set for their biggest weekly gain in nearly six years after Brazilian equities rallied earlier in the week. Brazil’s Bovespa gained 1.1% Friday and was set for its steepest weekly rise since April 2020; the real rose 0.8% and was set for its strongest week since October 2022. Brazilian equities recorded their highest-ever daily inflow on Monday, data from J.P. Morgan showed.
2. Election and inflation outlook
A Datafolha poll showed Flavio Bolsonaro with 49% of second-round vote intention, compared with President Luiz Inacio Lula da Silva’s 45%; the margin of error was 2 percentage points. Brazil’s annual inflation accelerated more than expected in September, rising above the central bank’s target range. Deutsche Bank economists expected the central bank to hold rates at its next two meetings, while saying risks were tilted toward two additional 25-basis-point cuts this year.
3. Regional currency moves
Mexico’s peso fell 1.4% and was set for its fifth consecutive weekly decline, the longest losing streak since early 2020. Colombia’s peso rose 1.1%, Chile’s peso was steady and Peru’s sol was little changed. Venezuela’s equities index jumped 10.9%.
