Latam assets head for weekly losses as rising oil, Treasury yields weigh
EWZ•Most Latin American assets were on track for weekly losses as elevated Treasury yields and prospects of further U.S. Federal Reserve rate hikes weighed on markets. Brazil’s annual inflation reached 4.47%, above the 4.3% forecast.
1. Regional markets weaken
MSCI’s Latin American equities index was little changed Friday, while its currency index slipped 0.1%; both were set for weekly losses of more than 1%. Oil prices eased 1.2%, while 30-year Treasury yields returned to multi-decade highs and the dollar index reached a nearly two-month high during the week. Colombia’s peso gained 1.4% Friday after nine consecutive sessions of declines.
2. Brazil inflation exceeds forecasts
Brazil’s annual inflation through mid-September reached 4.47%, above economists’ 4.3% forecast. The central bank cut rates for a fifth consecutive time last week and projected inflation close to its 3% target at the policy horizon for its next rate decision. Pantheon Macroeconomics economist Andres Abadia said the firmer underlying readings strengthen the case for gradual easing.
3. Country market moves
The Brazilian real gained 0.1%, while the Ibovespa fell 0.2%. Mexico’s peso gained 0.1% Friday but was heading for its biggest weekly decline since March; Mexican stocks rose 0.9%. Argentine stocks fell 1.7%, and Colombian stocks lost 0.7%.
