EMERGING MARKETS-LatAm assets slip as Middle East tensions push oil prices higher

July 23 (Reuters) - Most Latin American currencies and stocks weakened on Thursday as investors evaluated potential economic consequences of the [widening Middle East conflict](https://www.reuters.com/world/iran/), which pushed oil prices above $100 a barrel for the first time since May. MSCI's Latin American equity index .MILA00000PUS slid 1.5%, easing from a two-month high. A regional currencies gauge .MILA00000CUS also slipped 0.2% as investors flocked to the safe-haven dollar. Chile's peso CLP= depreciated 1.3% to hit its lowest levels since November 2025. The LatAm country is a net oil importer. Brent crude prices LCOc1 rose 7% as attacks on Saudi tankers in the Red Sea by Yemen's Houthi militia intensified disruptions to energy supplies and signaled a broadening conflict. "A lot of these countries that produce oil are not net producers because they have to also import oil and other chemicals to refine oil and even after refining, they have to import gasoline as well. So, the bill at the government level is not always a positive one," said Eduardo Ordonez Bueso, an emerging markets debt portfolio manager at BankInvest. Latin America has been relatively shielded from the Middle East conflict compared to broader emerging markets, given that many countries in the region are energy producers. "It's been a tough day for markets... with the price of a barrel of Brent crude hopping back over the psychologically important $100 a barrel benchmark," said Danni Hewson, AJ Bell head of financial analysis. However, energy prices staying at current levels for a prolonged period could weigh on economic growth, push up consumer inflation and prompt central banks to hike interest rates. Brazilian oil giant Petrobras PETR4.SA advanced 1.5%, while Argentina's YPF YPFDm.BA and U.S.-listed shares of Ecopetrol EC.N were marginally higher. Data showed the region's second-largest economy, Mexico, contracted in May from April. Separately, the annual inflation rate decelerated for an eighth consecutive fortnight in early July, although market participants would be keen to see how the recent spike in crude prices adds to price pressures in the months ahead. The data comes as Mexico's central bank held its benchmark interest rate at 6.5% last month while warning about persistent inflationary risks. Mexico's stocks benchmark .MXX edged 1.1% lower, while the peso MXN= dropped 0.9%. Investors were also keeping an eye on developments in Brazil after a U.S. tariff rate of 25% took effect on Wednesday and the country is bracing for an additional 12.5% in duties following the verdict of a U.S. forced labor probe. The real BRL= slipped 0.7%, while the Bovespa index .BVSP declined 0.5% as Petrobras' gains limited losses. Peru's sol PEN= was the outlier, firming against the dollar, while Colombia's peso COP= was muted. Equities in the two countries .MXNUAMPESCPGPE and .COLCAP were down 1.7% and up 0.2%, respectively. Elsewhere, South Africa's rand ZAR= slid 2.9% after the central bank unexpectedly kept its main lending rate unchanged. Turkey's central bank also left its key interest rate on hold at 37%. The equities index .XU100 dipped 0.4%, while the lira TRYTOM=D4 was flat at 47.23 per dollar.

EMERGING MARKETS-LatAm assets slip as Middle East tensions push oil prices higher

Latin American assets weaken on oil spike

Market commentary and country-level moves

Mexico, Brazil and other emerging market moves

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