LatAm stocks, FX mixed as oil and bond yields weigh; fiscal worries hit Colombia

Colombia's Congress on Monday approved the government's 2027 spending budget of 634.9 trillion pesos ($206.6 billion), as a sharp deterioration in public finances is expected to push the fiscal deficit to a record high next year. President Abelardo De La Espriella's government plans to submit a tax reform package, known as the "Rescue Law," and pursue spending cuts next year in an effort to reduce the fiscal deficit to 7.2% of gross domestic product, Finance Minister Miguel Gomez said. "We would also expect the government to continue pursuing executive actions next year to improve fiscal results," Citi analysts said in a note, adding that the key issue for the markets would be the "eventual magnitude and permanence of the expenditure savings." Colombian stocks `.COLCAP` fell 0.9%, while the peso `COP=` weakened 0.2%. Political developments remained in focus in Brazil, with a CNT/MDA poll released on Tuesday showing President Luiz Inacio Lula da Silva would defeat right-wing Senator Flavio Bolsonaro in a second-round runoff in next month's election. The survey added to a string of polls pointing to a tight presidential race ahead of the October vote. Markets have been closely watching shifts in political sentiment, with analysts viewing Bolsonaro as the more market-friendly candidate. Brazil's benchmark Bovespa stock index `.BVSP` rose 0.8%, recovering after a 0.9% decline on Monday, while the real `BRL=` was little changed. Brazilian retail sales fell more than expected in July, highlighting the strain that high borrowing costs are placing on consumer spending. "High borrowing costs are weighing most heavily on discretionary and durable purchases, while resilient employment and real-income growth continue to provide some support to essential spending," said Andrés Abadía, chief Latin America economist at Pantheon Macroeconomics. Attention will now turn to the central bank's monetary policy committee, known as Copom, which is expected to cut its benchmark interest rate to 13.75% from 14.00% on Wednesday. Sept. 15 (Reuters) - Latin American stocks and currencies were mixed on Tuesday as surging oil prices and rising global bond yields kept investor sentiment in check, while Colombian assets fell after the country's Congress approved the 2027 budget. MSCI's index tracking LatAm stocks `.MILA00000PUS` gained 0.2%, while a corresponding currencies gauge `.MILA00000CUS` also rose 0.2%, with both indexes stabilizing after the previous session's selloff. Elsewhere, oil prices extended their rally after attacks on energy infrastructure in the Gulf heightened supply concerns. Higher energy prices have supported assets in the region's net oil-exporting countries, though sustained strength in crude has also fueled inflation concerns and pushed global bond yields to multi-year highs, pressuring emerging markets as a whole. The Federal Reserve's policy decision on Wednesday remains the key event for global markets. The U.S. central bank is widely expected to raise rates by at least 25 basis points, compared with an even split between a hike and a pause just a week ago. In Peru, the economy expanded 3.56% in July from a year earlier, beating expectations as strong growth in construction, trade and services offset weakness in manufacturing, agriculture and fishing. The Peruvian sol `PEN=` eased 0.3%, while the country's stocks `.MXNUAMPESCPGPE` were flat.

LatAm stocks, FX mixed as oil and bond yields weigh; fiscal worries hit Colombia

Colombia fiscal worries pressure assets

Brazil politics and retail sales in focus

LatAm markets mixed as oil and yields weigh

Oil, Fed and Peru data add to regional backdrop

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