Latin American assets were mixed on Monday as investors looked ahead to U.S. inflation data for clues on the Federal Reserve's monetary policy outlook, while persistent uncertainty in the Middle East sent oil prices higher.
MSCI's index tracking Latin American equities .MILA00000POUS fell 0.23%, and was heading for a seventh straight session of losses, while the corresponding currencies gauge .MILA00000CUS edged 0.21% lower.
Mexican stocks .MXX fell 0.59% and were the biggest laggards in the region, while the peso MXN= dipped 0.1%.
The European Union imposed tariffs on terephthalic acid, a raw material used to make a common sort of plastic known as PET, made in South Korea and Mexico to protect producers in Belgium, Poland and Spain.
Colombian equities .COLCAP rebounded from early session losses triggered by a major earthquake on Monday that killed more than 100 people and caused widespread damage. Several dollar-denominated bonds also traded lower.
The peso COP=, however, rose 0.6% against a stronger dollar and was one of the biggest gainers among regional currencies.
The earthquake comes at a delicate time for the country, which is entering a new phase under right-wing President Abelardo De La Espriella.
De La Espriella, sworn in on Friday, pledged a fight against drug trafficking as well as austerity measures to restore confidence in the economy.
President Donald Trump's administration is also planning to provide $1 billion in security assistance to De La Espriella's government, the U.S. State Department said.
"That push marks a sharp break from the turbulent relationship under outgoing President Gustavo Petro, with whom Trump repeatedly clashed," wrote Jason Marczak and Bruce Mac Master, policy experts at Atlantic Council, a Washington, DC-based think tank.
"It also gives both administrations an opportunity to advance the agenda they have started to build during the transition," they added, noting that collaboration between the two countries could expand opportunities for U.S. business and boost Colombian production.
Elsewhere, Brazil's Bovespa .BVSP declined 0.1% and the real BRL= fell 0.6%.
Middle East and U.S. inflation risks remain in focus
Risks of inflation very much remain in focus as oil prices rose xx% after Tehran reiterated that it would not reopen the Strait of Hormuz until Washington met certain demands, while President Donald Trump demanded compensation in response.
The muted moves in Latin America stood in stark contrast to EM peers in Asia, where equities rose despite higher oil prices as investors seized on a weak U.S. jobs report last week.
The soft print for July payrolls in the U.S. last week lowered the odds of an interest rate hike by the Federal Reserve, boosting risk appetite.
"We think that it would take an unlikely significant upside surprise to tip the balance of FOMC voters towards a hike at the September Fed meeting," said Enrique Díaz-Alvarez, chief economist at Ebury.
Equities in Argentina .MERV gained the most, rising 1.1%.
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