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Latam FX, stocks up 0.3% each
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Brazilian consumer confidence rises in May from April
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Brazil posts smaller-than-expected April current account
deficit
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Mexico central bank minutes due on day
(Updates with mid-session prices)
By Nikhil Sharma and Purvi Agarwal
May 26 (Reuters) - Latin American assets strengthened on
Monday after U.S. President Donald Trump announced that he would
postpone the deadline for threatened tariffs on the European
Union, calming some revived trade war jitters.
MSCI's gauge for the region's equities rose
0.3%, while an index for currencies rebounded
0.3%.
The currencies index had dipped 0.3% in the prior session
after Trump took aim at the European Union, saying trade
negotiations with the region had become too sluggish.
On Sunday, he pushed the deadline for tariffs to July 9 from
June 1, after European Commission President Ursula von der Leyen
said the 27-nation bloc needed more time to produce a deal.
"In Latam, we are taking all these announcements with a
pinch of salt. ... The situation can change dramatically from
one day to another, so remaining cautious at the moment," said
Andres Abadia, chief Latam economist at Pantheon Macroeconomics.
Most Latam currencies were little changed against the dollar
in thin trading, with markets in the U.S. closed for a public
holiday.
Currencies in Mexico, Peru and Colombia
were flat against the greenback.
"Trade discussions and policy shifts continue to
influence the USD and U.S., both of which will constrain equity
markets," said Bob Savage, head of markets macro strategy at
BNY.
Minutes of the Bank of Mexico's last interest rate
meeting are due to be released later in the day.
Brazil's real dipped 0.4% against the dollar. Brazil
recorded a smaller-than-expected current account deficit in
April, but also posted a narrower trade surplus.
Separately, data showed Brazilian consumers displayed some
optimism in May, with the Consumer Confidence Index (ICC) rising
by 1.9 points to 86.7 points.
This week will see crucial data releases for Latin America's
largest economy, including gross domestic product figures for
the first quarter.
A poll conducted by Brazil's central bank showed economists
hiking their forecast for 2025 GDP growth to 2.14%, up from the
2.02% forecast in the previous week, amid indications from
policymakers that monetary policy needed to be more restrictive
amid persistent inflationary pressures and global uncertainties.
Sao Paulo's stock index was up 0.3%, while Chile's
main index reversed early gains to dip 0.2%.
Chile's peso gained 0.1%, boosted by higher copper
prices. The country is the world's largest copper producer.
Argentina's peso shed 0.9% after two sessions
of gains, while its stock index was 1.1% higher.
Latin America's broader currency index has risen 13.4% this
year, with the parallel stock index soaring about 22%.
Trepidation over economic growth, unpredictable trade
policies and fiscal risks, especially with Trump's spending and
tax-cut bill, have revived the "Sell America" narrative, with
investors cutting their exposure to U.S. assets.
The trend has put the spotlight on emerging markets, where
investors are aiming to build a more geographically diversified
portfolio.
J.P. Morgan upgraded its rating on emerging market equities
to "overweight" from "neutral" last week.
Key Latin American stock indexes and currencies:
Latin American market
prices from Reuters
MSCI Emerging Markets 1169.17 -0.15
MSCI LatAm 2254.38 0.26
Brazil Bovespa 138185.82 0.26
Mexico IPC 58309.64 -0.17
Chile IPSA 8382.99 -0.2
Argentina Merval 2370661.6 1.06
9
Colombia COLCAP 1653.66 -0.06
Brazil real 5.6698 -0.42
Mexico peso 19.2303 -0.03
Chile peso 938.37 0.14
Colombia peso 4146.59 -0.05
Peru sol 3.657 -0.03
Argentina peso (interbank) 1143 -0.87
Argentina peso (parallel) 1150 1.74