Latin American equities edge lower as markets brace for Fed clues

In Brazil, political developments remained in focus. The opposition prepared for demonstrations as right-wing presidential hopeful Senator Flavio Bolsonaro sought to capitalize on a crisis engulfing the country's Supreme Court to build momentum against leftist President Luiz Inacio Lula da Silva ahead of next month's election. Recent polls showed Lula's lead over Bolsonaro narrowing. Investors generally view Bolsonaro as the more market-friendly candidate amid concerns over Brazil's deteriorating fiscal outlook. In Chile, the world's largest copper producer, copper exports totaled $4.63 billion in August, down 3.2% from a year earlier, central bank data showed. MSCI's Chile equity index `.MICL00000PUS` edged lower, while the Chilean peso `CLP=` was flat. Chile's central bank is expected to leave interest rates unchanged at its policy meeting on Tuesday. Mexico's benchmark stock index `.MXX` and the peso `MXN=` fell 0.2% and 0.3%, respectively. Trading was subdued, with U.S. markets closed for the Labor Day holiday. Key Latin American stock indexes and currencies at 1947 GMT: | | | | | --- | --- | --- | | Stock indexes | Latest | Daily % change | | MSCI Emerging Markets `.MSCIEF` | 1755.68 | 1.7 | | MSCI LatAm `.MILA00000PUS` | 3153.64 | -0.21 | | Brazil Bovespa `.BVSP` | 185147.15 | -0.02 | | Mexico IPC `.MXX` | 64716.95 | -0.23 | | Chile MSCI index `.MICL00000PUS` | 1697.46 | -0.10 | | Argentina MerVal `.MERV` | 3033106.96 | -0.52 | | Colombia COLCAP `.COLCAP` | 2563.52 | 0.75 | | | | | | Currencies | Latest | Daily % change | | Brazil real `BRL=` | 5.1261 | 0.02 | | Mexico peso `MXN=` | 16.9266 | -0.27 | | Chile peso `CLP=` | 933.68 | 0 | | Colombia peso `COP=` | 3117.5 | 0.22 | | Peru sol `PEN=` | 3.359 | -0.17 | | Argentina peso (interbank) `ARS=RASL` | 1,511.0 | -0.17 | | Argentina peso (parallel) `ARSB=` | 1,525.0 | 0.97 | Most Latin American stocks dipped on Monday as fresh U.S.-Iran tensions and concerns over persistent global inflation kept investors cautious ahead of key U.S. consumer-price data later this week. MSCI's index of Latin American equities `.MILA00000PUS` slipped 0.2%. Markets in Brazil, the region's largest economy, were closed for the country's Independence Day holiday, contributing to thin trading volumes. The region's currency gauge `.MILA00000CUS` edged 0.1% lower, despite a 0.2% decline in the U.S. dollar `=USD`. Investors are now focused on U.S. inflation data due later this week, which could offer fresh clues on the Federal Reserve's interest-rate path. Iran threatened to target energy infrastructure across the Middle East if the U.S. launches further attacks on its assets, underscoring the risk of a broader conflict and dimming hopes for a diplomatic breakthrough. Brent crude climbed to a six-week high as supplies from the region were sharply curtailed. Elevated oil prices could add to global inflation pressures, cloud the economic outlook and push central banks toward a more restrictive policy stance. "A more hawkish Fed would likely initially support the U.S. dollar," UBS analysts said in a note, adding that the nature of that support would depend on the backdrop behind further rate hikes. "Inflation-led tightening alongside weaker growth would present a more mixed outlook, as higher yields may start to compete with concerns about fiscal sustainability and the longer-term economic outlook." Following a strong U.S. jobs report last week, traders have increased bets that the Fed will raise rates at its September 15-16 meeting. U.S. President Donald Trump added to market uncertainty on Friday, saying he would halt trade with countries with which the U.S. runs a deficit unless the Fed cuts interest rates.

Latin American equities edge lower as markets brace for Fed clues

Country-level moves in Brazil, Chile and Mexico

Latin American stocks and currencies edge lower

Oil, Fed expectations and U.S. politics weigh on sentiment

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Stock indexes	Latest	Daily % change
MSCI Emerging Markets `.MSCIEF`	1755.68	1.7
MSCI LatAm `.MILA00000PUS`	3153.64	-0.21
Brazil Bovespa `.BVSP`	185147.15	-0.02
Mexico IPC `.MXX`	64716.95	-0.23
Chile MSCI index `.MICL00000PUS`	1697.46	-0.10
Argentina MerVal `.MERV`	3033106.96	-0.52
Colombia COLCAP `.COLCAP`	2563.52	0.75

Currencies	Latest	Daily % change
Brazil real `BRL=`	5.1261	0.02
Mexico peso `MXN=`	16.9266	-0.27
Chile peso `CLP=`	933.68	0
Colombia peso `COP=`	3117.5	0.22
Peru sol `PEN=`	3.359	-0.17
Argentina peso (interbank) `ARS=RASL`	1,511.0	-0.17
Argentina peso (parallel) `ARSB=`	1,525.0	0.97