MSCI LatAm indexes hit one-week lows as oil jumps; Brazil eyed
SPY•MSCI's Latin American stock index fell 2.2% and its currency gauge dipped 0.4% as Brent crude rose 2% to $110 a barrel. Investors watched Brazil's election race, while Mexico's inflation rose more than expected in early October.
1. Regional markets fall
MSCI's Latin American stock index fell 2.2% to a one-week low on Thursday, while its currency gauge dipped 0.4% against the dollar. Brent crude rose 2% to $110 a barrel, its highest since May, after further Houthi attacks in Saudi Arabia raised concerns about escalation and supply disruptions.
2. Mexico inflation climbs
Mexico's peso hovered near 18.7 per dollar and stocks fell 1.4% after data showed headline inflation rose more than expected in early October. Investors have unwound carry trades after viewing minutes from the Bank of Mexico's latest meeting as moderately dovish; traders are also pricing in more U.S. Federal Reserve rate hikes.
3. Brazil election in focus
With less than a week until the runoff between Senator Flavio Bolsonaro and President Luiz Inacio Lula da Silva, investors awaited a Datafolha survey due after the market close. The Brazilian real fell 0.3% to 5.04 per dollar and the benchmark index lost 1.5%, weighed by Vale's 2.8% drop as iron ore prices declined. Peru announced economic measures to address a potential slowdown from El Niño.
