Emerging Markets-LatAm assets ease on firmer dollar, set for strong monthly gains

Most Latin American currencies weakened against a firm dollar on Friday, and equities retreated as copper prices eased, while investors assessed developments in the Middle East. MSCI's index tracking Latin American currencies .MILA00000CUS declined 0.2%, pulling back after strong gains in the previous session. Regional stocks also eased, with the MSCI Latin American equities gauge .MILA00000PUS declining 0.2%, though heading for monthly gains, as higher commodity prices supported sentiment. In Brazil, the real BRL= slipped 0.4%. Brazil's overall budget deficit widened to nearly 10% of gross domestic product (GDP) in the 12 months through June, data showed, as higher interest costs weighed on the public finances. "A deterioration on the fiscal (position) means that there could be a delay in rates coming down, which means that it's likely to be a headwind to growth," said Rohit Chopra, portfolio manager at Lazard Asset Management. Trading on Brazil's B3 stock exchange was delayed due to a clearing file issue and is scheduled to resume at 12:30 p.m. (1630 GMT), the exchange operator said. In a potential boost for Brazil's left-wing party and President Luiz Inácio Lula da Silva, the country's largest right-wing party said on Friday it would stay neutral in October's presidential election. Meanwhile, in Argentina, President Javier Milei unveiled a bill to reform the central bank's charter on Thursday, to strengthen the bank's independence and restrict its ability to finance government spending. "The country is thinking about the long term and making some of the much needed reforms that I think we've been all kind of bracing for," added Chopra. The Colombian peso COP= fell 0.4% ahead of the central bank's interest rate decision, with the bank widely expected to raise rates to curb inflation. Still, the peso was on track for its biggest monthly gain in 10 years, boosted by the victory of a conservative party in the elections last month. Oil prices gained 2% as traders assessed shipping disruptions in the Strait of Hormuz and attacks in the Red Sea by Iran-backed Houthis. O/R The Argentine peso ARS=RASL was muted, while its equities .MERV gained 0.6%. Meanwhile, Chile's copper output rose in June, while manufacturing production fell 3.2%. The Andean nation is the world's largest copper producer. The Chilean peso CLP= edged 0.2% lower, while its stocks .SPIPSA fell 0.6% tracking lower copper prices. Unemployment in Chile was recorded at 9.4% in the second quarter, data showed, while Colombia's urban jobless rate fell to 8% in June. Following is a summary of key Latin American stock indexes and currencies at 1510 GMT: | | | | | --- | --- | --- | | MSCI Emerging Markets .MSCIEF | 1663.36 | 6.42 | | MSCI LatAm .MILA00000PUS | 3088.72 | -0.16 | | Mexico IPC .MXX | 67533.28 | 0.36 | | Chile IPSA .SPIPSA | 10960.07 | -0.64 | | Argentina MerVal .MERV | 3325120.41 | 0.61 | | Colombia COLCAP .COLCAP | 2357.03 | 0.62 | | | | | | --- | --- | --- | | Currencies | Latest | Daily % change | | Brazil real BRL= | 5.0781 | -0.38 | | Mexico peso MXN= | 17.3453 | -0.13 | | Chile peso CLP= | 927.66 | -0.22 | | Colombia peso COP= | 3144.86 | -0.52 | | Peru sol PEN= | 3.3952 | -0.33 | | Argentina peso (interbank) ARS=RASL | 1,489.0 | 0.03 | | Argentina peso (parallel) ARSB= | 1,540.0 | 1.6 |

Emerging Markets-LatAm assets ease on firmer dollar, set for strong monthly gains

LatAm currencies and stocks ease

Brazil and Argentina developments

Chile, Colombia and market snapshot

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MSCI Emerging Markets .MSCIEF	1663.36	6.42
MSCI LatAm .MILA00000PUS	3088.72	-0.16
Mexico IPC .MXX	67533.28	0.36
Chile IPSA .SPIPSA	10960.07	-0.64
Argentina MerVal .MERV	3325120.41	0.61
Colombia COLCAP .COLCAP	2357.03	0.62


Currencies	Latest	Daily % change
Brazil real BRL=	5.0781	-0.38
Mexico peso MXN=	17.3453	-0.13
Chile peso CLP=	927.66	-0.22
Colombia peso COP=	3144.86	-0.52
Peru sol PEN=	3.3952	-0.33
Argentina peso (interbank) ARS=RASL	1,489.0	0.03
Argentina peso (parallel) ARSB=	1,540.0	1.6