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Brazil's government hikes 2024 GDP, inflation forecast

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Power firm Auren signs agreement to buy Brazil's AES ( AES )

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Chile's Cochilco raises 2024, 2025 copper price estimates

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Latam FX, stocks up 0.1% each

(Updated at 1938 GMT)

By Shashwat Chauhan and Johann M Cherian

May 16 (Reuters) - Chile's peso outperformed peers in

resources-rich Latin America on Thursday to hit a four-month

high, while investors assessed revised inflation and growth

forecasts out of the region's biggest economy, Brazil.

The currency of minerals-rich Chile climbed 0.7%,

extending its march to the fourth-straight day. The country's

copper commission (Cochilco) raised its average copper price

estimates for both this year and next.

Separately, President Gabriel Boric said Chile, the world's

second-largest lithium producer, will open calls in the second

half of 2024 for lithium component producers to obtain

preferential pricing on the metal.

The broader MSCI index tracking currencies in the region

inched up 0.1%, as the dollar recouped

some losses after Wednesday's cooler-than-expected April U.S.

consumer prices data, boosted hopes that the Federal Reserve

could kickstart its policy easing cycle as early as September.

The main MSCI index has managed a 0.5% gain year-to-date,

compared with an around 11% gain during the same period in 2023,

with local currencies under pressure as central banks in the

region kicked off monetary easing cycles earlier in 2024.

Brazil's real inched up 0.1% against the dollar, as

iron ore prices, one of the country's top exports, gained on

news of authorities in top consumer China considering government

purchases of unsold homes.

Separately, the country's Finance Ministry hiked projections

for economic growth this year but also raised inflation

estimates for 2024 and 2025, underlining price impacts from

recent floods in Rio Grande do Sul state.

Wilson Ferrarezi, economist at TS Lombard, however said

price pressures in Brazil have picked up markedly since January

2024.

"We believe this could be related to the minimum wage hike

in real terms that came into effect in January, precisely when

the job market was showing increasing signs of resilience."

Mexico's peso ticked up 0.1%, hovering near a

one-month high, while Colombia's peso and Peru's sol

slipped 0.2% and 0.4%, respectively.

On the equities front, MSCI's index for Latin American

stocks climbed 0.2%, with heavyweight Brazil's

stock index up 0.3%, helped by a 1% gain in copper giant

Vale.

Keeping a lid on the Bovespa, Petrobras slid

2.7%, its second-day of declines following a leadership change.

Auren dropped 1.3% after the power company said

it signed an agreement to buy the Brazilian operation of AES

Corp ( AES ) in a stock and cash deal.

Equities in Mexico climbed 0.3%, while those in

Colombia added 0.7%.

Argentina will post a budget surplus in April for the fourth

consecutive month under the new government, the country's

economy chief said late on Wednesday, touting the trend as a

reflection of stronger finances in the midst of an economic

slump.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1098.02 1.23

MSCI LatAm 2494.50 0.13

Brazil Bovespa 128418.76 0.31

Mexico IPC 57651.34 0.34

Chile IPSA 6659.57 -0.77

Argentina MerVal 1484402.74 0.447

Colombia COLCAP 1416.09 0.69

Currencies Latest Daily %

change

Brazil real 5.1293 0.14

Mexico peso 16.6678 0.07

Chile peso 898.4 0.63

Colombia peso 3825.19 -0.19

Peru sol 3.7199 -0.40

Argentina peso 886.0000 0.00

(interbank)

Argentina peso 1080 1.85

(parallel)