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EMERGING MARKETS-LatAm assets recover as global sentiment improves; Mexico holds rates
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EMERGING MARKETS-LatAm assets recover as global sentiment improves; Mexico holds rates
Jun 25, 2026 1:46 PM

* Brazil's central bank sees annual inflation at 3.1% in

late 2028

* Venezuela earthquakes pose debt restructuring risks

* Gabon's international bonds drop after Moody's cuts

outlook

(Updates with late afternoon trading)

By Avinash P, Ragini Mathur and Purvi Agarwal

June 25 (Reuters) - Most Latin American stocks rebounded on

Thursday as global risk appetite improved and currencies firmed

against a subdued U.S. dollar, while investors assessed the

Mexican central bank's decision to hold interest rates steady.

The stocks were also buoyed by rising commodity prices.

On Thursday, U.S. datashowed inflation topped 4% for the

first time in three years, reinforcing expectations that the

Federal Reserve could raise interest rates at least once this

year.

Still, optimism around AI chip stocks and a decline in oil

prices supported global equities earlier in the session.

However, global assets pared some of their gains as the rally

lost steam and oil prices reversed their declines.

MSCI's regional stocks index rose 1.6%,

while its currency index gained 0.6%, after both

gauges touched two-week lows in the previous session.

Meanwhile, thousands were feared deadin Venezuela after two

powerful earthquakes struck Caracas and surrounding areas,

further straining the country's debt restructuring efforts.

"The earthquakes likely increase the already high debt

restructuring risk and high political risk for acting President

Delcy Rodriguez," said Hasnain Malik, head of geopolitical risk

and EM equity strategy research at Tellimer.

"However, U.S. alignment likely provides a partial offset

for the pressure on the fiscal account and recent precedents

from other natural disasters in emerging markets suggest that

the impact on financial markets is limited and temporary."

In Mexico, the central bank held rates steady at 6.50%,

beginning an anticipated pause after a final rate cut in May

that concluded a more-than-two-year easing cycle.

Local stocks gained 1.6%, boosted by a 2.8% rise in

miner Grupo Mexico while the peso was up

0.6%. Both the stock index and the currency wereset for their

biggest one-day jump in two weeks.

"The balance of risks will tilt towards renewed tightening

towards the end of the year, reflecting persistent inflation

pressures and the prospect of Fed rate hikes," said Liam Peach,

senior EM economist at Capital Economics.

Brazil's central bank pushed back against market perceptions

that it had extended its monetary policy horizon, after its

latest rate decision steepened the yield curve. It also

published updated inflation forecasts showing price increases

near target by the end of 2028.

Brazil's Bovespa index advanced 1% and the real

was up 0.3%.

Colombia faces a funding shortfall of 39.6 trillion pesos

($11.55 billion) to meet its 2026 fiscal target, up from a

previous estimate of 32.1 trillion pesos, the Autonomous

Committee of the Fiscal Rule said.

Markets are watching how President-elect Abelardo De La

Espriella's administration will tackle deteriorating public

finances. His market-friendly rhetoric has helped local assets

rally, making Colombia the region's best-performing market

year-to-date.

Bogota equities were flat, while the peso

appreciated 0.3%.

Peru's right-wing presidential candidate Keiko Fujimori

maintained an unassailable lead, though the electoral authority

has yet to officially declare a winner. Lima's stocks benchmark

added 1%, while the sol was little

changed.

Elsewhere, Gabon's international bonds fell after Moody's

cut its outlook on the country's credit rating to "negative"

from "stable" citing fiscal imbalances.

Bonds due in 2031 fell as much as 1 cent on the dollar,

Tradeweb data showed. Those due in 2029 fell 0.8 cent.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1756.51 1.52

MSCI LatAm 2942.27 1.61

Brazil Bovespa 172137.35 0.96

Mexico IPC 67356.92 1.63

Chile IPSA 10748.84 0.69

Argentina Merval 3086555.2 -0.77

1

Colombia COLCAP 2270.68 -0.01

Currencies Latest Daily %

change

Brazil real 5.1798 0.3

Mexico peso 17.4893 0.6

Chile peso 920.37 -0.19

Colombia peso 3430.57 0.29

Peru sol 3.4194 -0.03

Argentina peso (interbank) 1477 0.14

Argentina peso (parallel) 1510 0

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