- Latam stocks, FX up 0.4% each
- Both indexes set for weekly gains
- Petrobras set for biggest weekly drop in over six months
World’s largest copper producer Chile’s CLP= peso strengthened 0.7%, as copper prices surged to multi-month highs after top-metals consumer China announced a stimulus package for its ailing property sector.
“Countries like Chile are seeing their currencies and their economies get back on green territory, and it has to do with commodities going up on this global recovery narrative,” said Juan G. Perez, director of trading at Monex USA.
“It has also been aided with the rescue package being put together by China.”
Mexico’s peso MXN= climbed 0.4%, on course for its third consecutive week in gains, while the yield on the benchmark 10-year sovereign bond MX10YT=RR ticked up to 9.6% after Banxico deputy governor said she does not foresee a cut to the benchmark interest rate in June, according to a report.
The peso has outperformed regional peers year-to-date as Banxico held back from further rate reductions after March, given fears of inflation pressures flaring up and as the U.S. Federal Reserve delays its monetary easing cycle.
MSCI’s Latam currencies index. MILA00000CUS ticked up 0.4% against the dollar and was set for a weekly rise of 1%.
Brazil’s real BRL= appreciated 0.5% as prices of iron ore, one of the country’s top exports, jumped to a one-week high.
Local central bank chief Roberto Campos Neto said he cannot anticipate future interest rate cuts in the country, after the monetary authority earlier this month voted to slow the pace of its easing cycle citing local and global uncertainties.
On the equities front, MSCI’s gauge for stocks. MILA00000PUS gained 0.4%, on course for a weekly gain of 0.6%.
Brazil’s Bovespa. BVSP was flat with Petrobras <PETR4.SA> dropping after the oil firm sacked 20 employees who worked closely with the former CEO, who was let go earlier in the week. The stock has lost over 11% in this week alone and is poised for its biggest weekly drop in nearly seven months.
Energy firms 3R Petroleum RRRP3.SA and Enauta ENAT3.SA said they had reached an agreement to merge in an all-stock deal. 3R’s shares rose over 6%, and Enuata was last up close to 2.5%.
Mexico‘s main index. MXX added 0.3%, underpinned by gains in miners PenolesPEOLES.MX and Grupo Mexico.
Elsewhere, citizens in the Dominican Republic geared up for the first round of presidential elections on Sunday.
