- Latam stocks down 0.27%, FX up 0.13%
- Industrial production in Brazil falls for 4th consecutive month
- US July job openings below estimates
The MSCI index for Latin American currencies .MILA00000CUS rose 0.13%, while the dollar index =USD dipped after economic data showed weakening U.S. labor demand.
A Labor Department report showed U.S. job openings fell more than expected in July, and hiring was moderate. Investors now await Friday’s nonfarm payroll numbers, which could further guide the policy easing expectations.
“The story of today is you have somewhat established that the Federal Reserve is going to be acting on September 17th and they’re going to be convinced to go ahead and slash interest rates by 25 basis points,” said Juan Perez, director of trading at Monex.
“So that’s not a shock and that’s why you’re seeing the market trading within these tight ranges.”
In Latin America, Brazil’s real BRL= clawed back from a two-week low, gaining for the first time in four sessions.
A Reuters poll showed Brazil’s real currency is forecast to fall moderately in the coming months, when it should remain supported by U.S. dollar weakness and wide interest rate spreads.
Fresh data showed the pace of contraction in Brazil’s services sector eased in August, while another indicator showed the country’s fourth straight month of no growth in industrial output.
The country’s interest rates, parked near a 20-year high, have started to bite growth amid the central bank’s fight against inflation.
Latin America’s largest economy raised $3.25 billion in a two-part sovereign bond sale on Tuesday, to ease trading of Brazil’s dollar bonds abroad, set benchmarks for companies and pre-fund upcoming foreign debt.
Meanwhile, Sao Paulo .BVSP stocks fell 0.49% on Wednesday, pressured by lower energy stocks.
A broader gauge for Latin American stocks .MILA00000PUSfell 0.26%, on pace for its fourth straight session of losses.
Argentina’s peso ARS=RASL remained steady ahead of elections in Buenos Aires on September 7 and midterm polls in October. The Treasury said on Tuesday it will move to support liquidity with interventions, aiming to stabilize the currency.
The local benchmark index .MERVdropped 1.72%.
Chilean stocks .SPIPSA rose 0.58% to a record high, while the country’s peso CLP= was up 0.93%, ahead of inflation data due on Friday.
The Mexican peso MXN=eased 0.09%, while the country’s stocks .MXXmoved 0.27% lower. Data showed the consumer confidence index was 46.7 in August.
In Central and Eastern Europe, Poland’s central bank lowered interest rates by 25 basis points in a widely expected move. The benchmark WIG20 .WIG20 index gained 0.44% while the zloty EURPLN= remained stable.
Turkish stocks .XU100 fell 1.3%, taking its two-day drop to nearly 5%, as political risk flared with the ouster of the CHP’s Istanbul head.
