EMERGING MARKETS-Latin America stocks, FX outperform EM this month

Kitco Media
By Reuters
Published:
Updated:
Reuters
(There will be no Latam-focused emerging markets reports on Monday due to a public holiday in the region. Reuters will resume coverage on Tuesday)
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Brazil's public sector gross debt stable at 73% of GDP in March

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Brazil's IBC-Br economic activity index surges 3.3% in Feb

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Mexican economy grows more than expected in Q1

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Paraguay elections on April 30


By Bansari Mayur Kamdar April 28 (Reuters) - Stocks and currencies in Latin America outperformed their emerging market peers in April, while Colombia's peso was subdued on Friday ahead of its interest rate decision after a rough week following the surprise ouster of Finance Minister Jose Antonio Ocampo. The peso was flat at 1052 ET against the dollar, ahead of Colombia's interest rate decision at 1400 ET (1800 GMT). The market is divided about whether Colombia's central bank board will raise its benchmark interest rate in a final hike in its tightening cycle or hold borrowing costs at 13% as it weighs inflation and growth risks at the meeting. The Colombian peso was still on track for its worst weekly performance in six weeks as President Gustavo Petro replaced
Ocampo with Ricardo Bonilla in a cabinet reshuffle.


The Argentinian peso traded at 461 against the dollar in the popular black market, after falling as much as 495 per dollar this week amid rising political and economic turmoil. The central bank hiked its benchmark interest rate a huge 10 percentage points to 91% on Thursday as it tries to tame high inflation and steady the peso currency. "The macroeconomic backdrop remains very complex," said Sergio Armella, an economist at Goldman Sachs in a note. "International reserves are running low, the government’s attempts to contain price increases have been unsuccessful, inflation dynamics have deteriorated, and the authorities appear to have missed the fiscal target for the first quarter of 2023 established in the program with the IMF." Overall, the MSCI's index for Latin American currencies was set for 1.9% gains this month, outperforming its emerging market peers. The Brazilian real was the top performing Latam currency against the dollar in April, up 1.5%. On Friday, however, the real slipped 0.6% against a stronger dollar.


Brazil's economic activity surged in February from the month before, central bank data showed.


Another set of figures showed the government's debt as a share of gross domestic product remained steady at 73.0% in March from the same level in February. Currencies of copper produces Chile and Peru gained 0.1% and 0.9%. Mexico's peso added 0.1% after data showed the Mexican economy accelerated its growth rate in the first quarter, driven by a solid performance of its huge services sector and industrial production, which offset a contraction of agricultural activities. Paraguay will hold general elections on April 30, with the ruling conservative Colorado Party facing a challenge from a broad center-left coalition.


Latin American stocks also outpaced their emerging market peers this month.


Elsewhere in emerging markets, the Russian rouble firmed 2% against the dollar after the central bank held interest rates at 7.5% but kept the prospect of future rate hikes on the table.
Stock indexes Latest Daily % change MSCI Emerging Markets 976.30 0.42 MSCI LatAm 2209.33 -0.48 Brazil Bovespa 103746.35 0.8 Mexico IPC 54865.60 0.78 Chile IPSA 5402.81 -0.15 Argentina MerVal 291867.76 -1.665 Colombia COLCAP 1171.10 0.31


Currencies Latest Daily % change Brazil real 5.0037 -0.49 Mexico peso 18.0290 -0.02 Chile peso 802.3 -0.22 Colombia peso 4659.6 -0.21 Peru sol 3.7065 0.08 Argentina peso (interbank) 222.5800 -0.25 Argentina peso (parallel) 461 1.30 (Reporting by Bansari Mayur Kamdar in Bengaluru Editing by Alistair Bell)

@BansariKamdar;))
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