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Latam, Caribbean growth to slow in 2024, says World Bank

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Mexico's annual inflation eases further, fueling rate-cut

bets

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Latam FX down 0.9%, stocks off 1.3%

(Updated at 1849 GMT)

By Shashwat Chauhan and Johann M Cherian

Oct 9 (Reuters) - Brazil led declines across most Latin

American equities on Wednesday after data pointed to local price

pressures picking up, while currencies in the region also took a

hit tracking lower commodity prices.

The Bovespa slid 1.3% to levels seen two months ago

after consumer prices in the region's biggest economy rose 4.42%

in September, closing in on the upper limit of the central

bank's target range.

The stocks index has fallen over 5% from its record high hit

in late August, as investors priced in further interest rate

hikes by the Copom to battle signs of resurgence in inflation.

The yield on 2-year bonds ticked up 9 basis

points, but the real depreciated 1% to touch a two-week

low as iron ore prices slipped.

Mexico's peso weakened 0.6%, while the local stock

index rose 0.5% after data showed the country's 12-month

headline inflation rate fell again in September, raising

expectations that the central bank will continue to cut its

benchmark interest rate.

"The September CPI print, alongside the weakness in the

economy and the fact that the Fed is now easing monetary policy

too, support our view that Banxico will cut rates by 25 bps at

each of the remaining meetings this year, taking the policy rate

to 10.00% by December," said Jason Tuvey, deputy chief emerging

markets economist at Capital Economics.

MSCI's index tracking Latin American currencies

dropped 0.9% to a two-week low, with oil

producer Colombia's peso off 0.1% as crude oil prices

fell more than 1%.

Late on Tuesday, Colombia's National Electoral Council

requested an investigation into the 2022 election campaign of

President Gustavo Petro over alleged violation of financing

limits.

Colombia's dollar-denominated bonds were slightly lower

across the board.

Slipping copper prices weighed on Chile's peso, with

the currency of the world's biggest producer of the red metal

down 0.1% against the dollar.

The dollar firmed globally ahead of the release of minutes

from the Fed's September policy meeting later in the day. A

consumer price index reading due on Thursday.

MSCI's index tracking regional bourses shed

1.3%, to a near one-month low, although Argentina's MerVal index

and Chilean stocks added 2% and 0.8%,

respectively.

Peruvian equities dropped 1.4% to a two-month

low. The country's state-run Fiscal Council said that the

current management of public finances had led to an

"uncontrolled" increase in the fiscal deficit to well above the

official rule.

Elsewhere, the World Bank said growth in Latin America and

the Caribbean is expected to weaken to 1.9% this year from 2.1%

in 2023 before accelerating again in 2025.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1147.84 -0.73

MSCI LatAm 2178.81 -1.40

Brazil Bovespa 129834.15 -1.28

Mexico IPC 51983.04 0.42

Chile IPSA 6541.23 0.75

Argentina Merval 1764658.6 1.923

7

Colombia COLCAP 1305.12 0.39

Currencies Latest Daily %

change

Brazil real 5.5965 -1.11

Mexico peso 19.4747 -0.74

Chile peso 932.5 -0.09

Colombia peso 4231.86 -0.21

Peru sol 3.7197 0

Argentina peso 974.5 0.00

(interbank)

Argentina peso (parallel) 1155 1.73