Emerging Markets-LatAm assets advance on strength in commodities; Middle East conflict in focus

The MSCI Latin American equity index `.MILA00000PUS` edged 0.2% higher and was also up on the week. Argentine stocks `.MERV` were set to clock the biggest weekly gain in the region despite retreating 1.1% on Friday, while Colombia's peso `COP=` , up 0.2% on the day, was on track to be the best performing local currency for the week. Equities in Colombia `.COLCAP` were up 0.4%. Brazil's Bovespa share index `.BVSP` declined 0.8%, while the real `BRL=` advanced 0.6%. The country has been back in the spotlight following the United States' new 25% tariffs on the country's exports. Argentine President Javier Milei is flying to Brazil on Friday to help kick-start Senator Flavio Bolsonaro's presidential run. The son of former President Jair Bolsonaro has slipped behind President Luiz Inacio Lula da Silva in the polls. U.S. and Mexican officials said on Thursday they will meet for further talks to revamp the North American trade pact in September. Both the Mexican peso `MXN=` and the country's stock market were up 0.3%. The Chilean peso `CLP=` traded 0.3% higher. JPMorgan cut the currency's rating from 'overweight' to 'neutral', on the re-escalation of hostilities in Middle East. Chilean equities `.SPIPSA` rose 0.4%, as copper prices gained more than 1% on the week. | | | | | --- | --- | --- | | Stock indexes | Latest | Daily % change | | MSCI Emerging Markets `.MSCIEF` | 1632.09 | -2.38 | | MSCI LatAm `.MILA00000PUS` | 3051.1 | 0.16 | | Brazil Bovespa `.BVSP` | 175295.45 | -0.81 | | Mexico IPC `.MXX` | 66465.73 | 0.3 | | Chile IPSA `.SPIPSA` | 10963.36 | 0.43 | | Argentina MerVal `.MERV` | 3284575.3 | -1.05 | | Colombia COLCAP `.COLCAP` | 2291.68 | 0.37 | | | | | | --- | --- | --- | | Currencies | Latest | Daily % change | | Brazil real `BRL=` | 5.0547 | 0.57 | | Mexico peso `MXN=` | 17.4415 | 0.34 | | Chile peso `CLP=` | 942.75 | 0.28 | | Colombia peso `COP=` | 3195.61 | 0.15 | | Peru sol `PEN=` | 3.4057 | -0.36 | | Argentina peso (interbank) `ARS=RASL` | 1,494.0 | -0.30 | | Argentina peso (parallel) `ARSB=` | 1,525.0 | 1.61 | Most Latin American assets advanced on Friday and were heading for weekly gains, as higher commodity prices helped offset worries about inflation triggered by escalating hostilities in the Middle East. The widening U.S.-Iran conflict after attacks by Yemen's Tehran-backed Houthi militia on vessels in the Red Sea — a second major shipping chokepoint — threatened to further disrupt energy supplies. Although oil prices eased on Friday, they were heading for a fourth straight weekly gain and have surged more than 35% this month. Traders, wary of the inflationary impact, have increased their bets on a Federal Reserve interest rate hike next week to a roughly 35% probability, more than double the chances seen last week, according to the CME Group's FedWatch tool. MSCI's Latin American currency index `.MILA00000CUS` edged 0.3% higher against the dollar and was also heading for weekly gains. The region's currencies continue to outperform those of broader emerging-markets, supported by the higher oil prices. Jesse Rogers, head of LatAm economics at Moody’s Analytics, expects the currencies to remain strong. > "In Iran, things are more or less playing out with our baseline, which was for a resolution but with continued skirmishes and continued flare-ups that would prevent the price of oil from coming back to pre-war levels....and that really helps countries like Brazil and Mexico," he said.

Emerging Markets-LatAm assets advance on strength in commodities; Middle East conflict in focus

Regional indexes, currencies and policy developments

Key Latin American stock indexes and currencies at 15:18

LatAm assets advance as commodities support currencies and stocks

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Stock indexes	Latest	Daily % change
MSCI Emerging Markets `.MSCIEF`	1632.09	-2.38
MSCI LatAm `.MILA00000PUS`	3051.1	0.16
Brazil Bovespa `.BVSP`	175295.45	-0.81
Mexico IPC `.MXX`	66465.73	0.3
Chile IPSA `.SPIPSA`	10963.36	0.43
Argentina MerVal `.MERV`	3284575.3	-1.05
Colombia COLCAP `.COLCAP`	2291.68	0.37


Currencies	Latest	Daily % change
Brazil real `BRL=`	5.0547	0.57
Mexico peso `MXN=`	17.4415	0.34
Chile peso `CLP=`	942.75	0.28
Colombia peso `COP=`	3195.61	0.15
Peru sol `PEN=`	3.4057	-0.36
Argentina peso (interbank) `ARS=RASL`	1,494.0	-0.30
Argentina peso (parallel) `ARSB=`	1,525.0	1.61