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Mexico's core prices in February slowed
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Brazil net formal job creation drops by half in Jan
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Brazil's Hapvida falls on potential capital increase
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Latam FX down 0.6%, stocks down 2%
(Adds market details, updates prices)
By Shubham Batra and Ankika Biswas
March 9 (Reuters) - The Mexican peso on Thursday bucked
the upward trend among other Latin American currencies as
falling inflation strengthened the case for the central bank to
slow its pace of interest rate hikes, while Colombian stocks
spearheaded the losses among their peers.
The Mexican peso lost 1.1%, on track for its biggest
one-day fall in over a month.
The second-largest Latin American economy's core consumer
prices slowed by more than expected in the year to February,
providing some relief from high inflation and interest rates.
"Today's (inflation) print reduces the odds that (central
bank) chooses to go ahead with a 50 bps hike, though incoming
data as well as the outlook for the Fed remain key influences on
the bank's decision," Scotiabank economists said in a note.
Losses in the Mexican peso outweighed the gains in others
and pulled the MSCI's index for Latin American currencies down by 0.6% at 2020 GMT.
Among other currencies, Peru's sol , Chile's peso and Colombia's peso gained between 0.4% and 1.2%.
The dollar dipped 0.3%, retreating from a three-month
high hit on Wednesday, after higher-than-expected U.S. weekly
jobless claims spurred hopes that a softening labour market will
reduce the chances of the Federal Reserve re-accelerating the
pace of its rate hikes.
Meanwhile, the Brazilian real was largely
muted against the dollar.
Brazil's net formal job creation fell by half in January on
the year, highlighting challenges for a year of expected
economic slowdown.
All eyes are on the country's new fiscal framework, with
Brazil's planning and budget minister, Simone Tebet, sounding
confident of its acceptance by people, even within the market.
A survey conducted by HSBC revealed improving emerging
markets (EM) investor sentiment.
Investors are still most worried about a recession in major
economies driven by higher interest rates, while on the flip
side, a strong rebound in mainland China could boost the EM
outlook, the survey showed.
Further on the economic front, a Moody's executive
highlighted that Chile's rejection of a tax reform put forward
by leftist President Gabriel Boric will complicate the country's
process of fiscal consolidation and gradually push up the debt.
Meanwhile, stocks in Latin America declined
nearly 2%, with Colombian shares dropping 1.7%.
Brazil's Bovespa index lost 0.1%, with healthcare
company Hapvida plunging 32%, after the firm said it
was "studying mechanisms to improve its capital structure".
Shares of mining company Vale SA dropped 1.3%,
tracking lower copper prices after China's economic data
underlined worries about sluggish demand in the top metals
consumer, while rising U.S. interest rates also remain on the
radar.
Key Latin American stock indexes and currencies at 2020 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 969.21 -0.91 MSCI LatAm 2212.97 -1.9
Brazil Bovespa 106460.81 -0.07
Mexico IPC 53542.90 0.29
Chile IPSA 5409.47 -0.16 Argentina MerVal 249105.53 -0.72
Colombia COLCAP 1220.32 -1.7 Currencies Latest Daily %
change
Brazil real 5.1343 0.08
Mexico peso 18.1586 -1.05
Chile peso 795.4 1.16
Colombia peso 4744.11 0.63
Peru sol 3.7735 0.36
Argentina peso (interbank) 200.3400 -0.17 Argentina peso (parallel) 369 2.44 (Reporting by Shubham Batra, Amruta Khandekar and Ankika Biswas
in Bengaluru
Editing by Shounak Dasgupta and Matthew Lewis)
