LatAm assets rise on commodity surge; Brazil poll tightens race

In Brazil, politics remained at the forefront of market sentiment. A Nexus poll commissioned by BTG Pactual showed on Tuesday for the first time Brazilian right-wing senator Flavio Bolsonaro slightly ahead of left-wing President Luiz Inacio Lula da Silva in a simulated second-round runoff for next month's election. Recent polls have pointed to a tightening race, with Bolsonaro steadily closing the gap on Lula. First-round voting for the presidential election is scheduled for October 4 while a second-round runoff would be held on October 25. The election outcome remains a key driver for domestic assets, with investors closely monitoring the worsening public finances under the current administration. Gains for Bolsonaro, widely seen by investors as the more market-friendly candidate, helped lift the benchmark Bovespa `.BVSP` up 2.2%. Miner Vale `VALE3.SA` rose 2.3% and oil major Petrobras `PETR4.SA` gained 2.6% and were among the biggest boosts on the benchmark index. The real `BRL=` strengthened 1%. "There is some still political risk in Brazil, but it has very high carry and strong commodities. Those two, mostly dominated in terms of just attracting investor capital into these markets," said Lale Akoner, global market strategist at eToro. "Much of the macro drivers are aligning well in terms of boosting these markets right now." The MSCI's regional FX index `.MILA00000CUS` gained 0.7%, supported by a softer U.S. dollar and attractive carry opportunities offered by Latin America's high-yielding currencies. Key Latin American stock indexes and currencies at 1446 GMT: | | | | | --- | --- | --- | | Latin American market prices from Reuters | | | | Equities | Latest | Daily % change | | MSCI Emerging Markets `.MSCIEF` | 1753.82 | -0.17 | | MSCI LatAm `.MILA00000PUS` | 3216.93 | 1.97 | | Brazil Bovespa `.BVSP` | 189253.3 | 2.22 | | Mexico IPC `.MXX` | 64953.73 | 0.35 | | Chile MSCI index `.MICL00000PUS` | 1706.15 | 0.51 | | Argentina Merval `.MERV` | 3059661.27 | 0.826 | | Colombia COLCAP `.COLCAP` | 2563.29 | -0.09 | | | | | | Currencies | Latest | Daily % change | | Brazil real `BRL=` | 5.0764 | 0.97 | | Mexico peso `MXN=` | 16.9072 | -0.05 | | Chile peso `CLP=` | 925.29 | 0.89 | | Colombia peso `COP=` | 3116.01 | 0 | | Peru sol `PEN=` | 3.353 | 0.13 | | Argentina peso (interbank) `ARS=RASL` | 1508 | 0.30 | | Argentina peso (parallel) `ARSB=` | 1525 | 1.31 | Across the region in Chile, consumer prices rose 0.6% in August from the previous month, data from statistics agency INE showed, while the annual inflation hit 4.1%, accelerating from a 3.5% increase registered in July and surpassing the central bank's 2% to 4% target range. Investors are awaiting the central bank's rate decision later in the day, with policymakers widely expected to hold rates steady at 4.5%. Chilean stocks `.MICL00000PUS` advanced 0.5%, tracking copper prices which hit record highs, as Chile is the world's largest copper producer. MET/L The peso `CLP=` appreciated 0.9%. The stock index in Peru `.MXNUAMPESCPGPE` — another of the world's key copper producers — climbed 1.2%, buoyed by the copper rally. In Colombia, consumer prices rose 0.39% in August, the country's DANE statistics agency said on Monday, taking annual price growth to 6.24%, which remains well above the central bank's target range of 3% plus or minus one percentage point. Equities in Bogota `.COLCAP` were lower, while the peso `COP=` remained firm. Most stocks and currencies in the resource-laden Latin American region edged higher on Tuesday as higher commodity prices buoyed risk appetite, while a fresh poll from Brazil showed a very tight contest between the presidential candidates. Oil, a key export from the region, hit multi-week highs on Tuesday after Iran-backed Houthis attacked Saudi energy facilities and Tehran threatened the United States with "economic warfare". O/R An index tracking LatAm equities `.MILA00000PUS` rose 2% to hit a record high.

LatAm assets rise on commodity surge; Brazil poll tightens race

Brazil election race tightens

Key Latin American market moves

Chile and Colombia inflation data

LatAm assets rise as commodities and Brazil poll support sentiment

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Latin American market prices from Reuters
Equities	Latest	Daily % change
MSCI Emerging Markets `.MSCIEF`	1753.82	-0.17
MSCI LatAm `.MILA00000PUS`	3216.93	1.97
Brazil Bovespa `.BVSP`	189253.3	2.22
Mexico IPC `.MXX`	64953.73	0.35
Chile MSCI index `.MICL00000PUS`	1706.15	0.51
Argentina Merval `.MERV`	3059661.27	0.826
Colombia COLCAP `.COLCAP`	2563.29	-0.09

Currencies	Latest	Daily % change
Brazil real `BRL=`	5.0764	0.97
Mexico peso `MXN=`	16.9072	-0.05
Chile peso `CLP=`	925.29	0.89
Colombia peso `COP=`	3116.01	0
Peru sol `PEN=`	3.353	0.13
Argentina peso (interbank) `ARS=RASL`	1508	0.30
Argentina peso (parallel) `ARSB=`	1525	1.31