Latam shares gain, FX mixed as investors weigh Mexico, Brazil data
SPY•Most Latin American stocks rose on Monday while currencies were mixed. Mexico’s October headline inflation reached 3.75%, above expectations, and Brazil’s IGP-DI inflation slowed to 1.15%; the regional equities index gained 1.33%.
1. Mexico inflation rises
The Mexican peso gained 0.15% to 18.5785 per dollar after October headline inflation accelerated to 3.75% year on year, above expectations of 3.65%. Core inflation was 3.80%, also above forecasts. The figures reinforced expectations that the Bank of Mexico will keep its benchmark rate unchanged for an extended period after cutting it by 25 basis points to 6.25% last week. Mexican equities rose.
2. Brazil and regional markets
Brazil’s IGP-DI price index rose 1.15% in October, down from 1.50% in September. The real was little changed and Brazilian stocks gained 1.7%, with financials providing the biggest boost. MSCI’s Latin American equities index rose 1.33%, while its currency index was flat.
3. Commodities and other markets
Brent crude fell more than 5% after President Donald Trump played down the likelihood of renewed strikes on Iran, while attacks on ships near the Strait of Hormuz kept supply concerns in focus. Gold rose more than 1% and copper rebounded. Colombia’s peso fell 0.98% ahead of consumer inflation data; the Peruvian sol and Chilean peso gained 1% and 0.54%, respectively.
