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Chile economic activity index posts surprise annual fall
in Feb
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Mexican factories expand for second straight month
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MSCI Latam FX index slips 0.2%, stocks off 0.7%
(Updates throughout, adds comment)
By Shashwat Chauhan and Bansari Mayur Kamdar
April 3 (Reuters) - Chile's peso led regional losses
against the dollar on Monday, after a survey showed the world's
largest copper producer's economic activity fell in February as
mining and service activities dragged.
Chile's IMACEC economic activity index - a close proxy of
gross domestic product - dropped 0.5% in February compared to
the same month last year, well below the forecast of a 0.1%
increase.
The peso shed 1.8% against the dollar, with weakness
in copper prices also weighing as manufacturing activity in top
consumer China stalled and higher oil prices stoked fears about
inflation and higher interest rates in the U.S.
Currency of no.2 copper producer Peru slipped 0.3%
against the greenback.
Oil exporter Colombia's peso gained 1.3% against the
dollar as crude prices surged after OPEC+ oil producers on
Sunday announced further oil output cuts of around 1.16 million
barrels per day, aggravating concerns around global inflation.
"Commodity prices have adjusted down in the past few weeks,
particularly crude oil of which the region (Latam) is an
important producer," said Alfredo Coutino, director for Latin
America at Moody's Analytics.
"This probably will be reflected in Latin American
currencies in the sense that it creates the perspective of
increase in foreign revenues for the region."
The Mexican peso shed 0.5%, while Brazil's real was flat.
Data showed Mexico's manufacturing sector grew for a second
straight month in March as firms hired workers, supply-chain
pressures eased, and input cost inflation slowed to a
1-1/2-year-low.
The MSCI's index for Latin American currencies snapped its 10-day streak of gains, slipping
0.2%, while stocks fell 0.7%.
Shares of Brazil's state-owned Petrobras and
Colombia's majority state-owned oil company Ecopetrol added nearly 3.5% each.
Latin American currencies posted their best quarterly performance in a year on Friday, outperforming their emerging market peers boosted by hawkish central bank policies in the region and hopes of a rebound in top commodities consumer China. "The OPEC+ production cut decision is likely to keep various central banks in EM on the cautious side, despite peaking inflation and growth headwinds," said Natalia Gurushina, Emerging Markets Fixed Income economist at VanEck, in a note. The International Monetary Fund (IMF) executive board approved changes to Argentina's reserves accumulation target set in their $44 billion program, as the agriculture powerhouse faces a severe drought seen pummeling both exports and economic growth.
Elsewhere in emerging markets, the Bank of Israel raised its benchmark interest rate by another quarter of a percentage point. The shekel edged 0.1% higher.
Latin American stock indexes and currencies at 1805 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 988.70 -0.16 MSCI LatAm 2177.79 -0.74
Brazil Bovespa 101104.16 -0.76
Mexico IPC 53697.95 -0.38
Chile IPSA 5301.51 -0.43
Argentina MerVal 253486.51 3.162
Colombia COLCAP 1165.39 0.67
Currencies Latest Daily %
change
Brazil real 5.0688 -0.04
Mexico peso 18.1023 -0.51
Chile peso 808.5 -1.74
Colombia peso 4600.1 1.12
Peru sol 3.7653 -0.20
Argentina peso (interbank) 210.3400 -0.63 Argentina peso (parallel) 388 1.80 (Reporting by Shashwat Chauhan in Bengaluru; Editing by Grant
McCool and Josie Kao)
