LatAm assets mixed as rising dollar, yields offset metals support
EWZ•Latin American stocks rose 0.1% while currencies fell 0.2% as a stronger U.S. dollar and rising Treasury yields weighed on risk appetite. Brazil posted a 13.585 billion-real primary deficit in August, narrower than economists expected, while Colombia held talks with the IMF about possible financing.
1. Regional markets diverge
Latin American assets were mixed on Tuesday as the stronger U.S. dollar and rising Treasury yields dampened risk appetite. MSCI’s Latin American stock index gained 0.1%, while its currency index fell 0.2% to its lowest level since July 9. Brent crude fell 2.5% but remained above $100 a barrel after Saudi Arabia resumed loading oil at Yanbu.
2. Brazil fiscal figures
Brazil’s government posted a primary deficit of 13.585 billion reais in August, narrower than the 14.40 billion reais economists expected. Loan defaults in the country hit a record high that month, central bank data showed. Vale fell 2.3%, while a 1.3% gain in Itau Unibanco helped the Ibovespa rise 0.45%.
3. Colombia seeks financing
Colombian authorities have held talks with the International Monetary Fund in recent weeks about possible financing as fiscal challenges deepen following an earthquake. The peso rose 1.3%, and investors awaited the central bank’s rate decision later in the week; policymakers were expected to leave borrowing costs unchanged.
