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Latam stocks down 0.5%, FX down 0.6%

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Mexico's judicial elections due on Sunday

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Brazil's Azul slumps on bankruptcy filing

By Pranav Kashyap

May 28 (Reuters) - A strengthening U.S. dollar cast a

shadow over most Latin American currencies on Wednesday, while

global investor attention pivoted towards the impending results

from AI titan Nvidia ( NVDA ).

MSCI's broad gauge for the region's currencies

fell 0.6% as the greenback ticked up

0.2%.

Its counterpart for equities eased 0.54%,

retreating from a more than eight-month peak hit the previous

session.

In Brazil, the benchmark stock index lost 0.3%,

weighed down by a sharp drop in the nation's airline Azul

.

The carrier's shares tumbled as much as 11% after it

initiated Chapter 11 bankruptcy protection proceedings in the

U.S. earlier in the day.

Brazil's equity gains the day before were largely powered by

data showing the country's inflation rate decelerated for the

third consecutive reading, a welcome sign the central bank's

sustained efforts - keeping interest rates at their highest in

nearly two decades - are beginning to yield results.

The real lost nearly 1%.

Fresh GDP figures for the first quarter, due for release on

Friday, may shed more light on Brazil's economic landscape.

Meanwhile, Mexico is on the cusp of its first-ever judicial

elections this Sunday. Voters will cast ballots for federal

judges and magistrate roles, a roster that includes all Supreme

Court justice positions.

The Mexican peso still bears the scars of a market

exodus triggered when President Claudia Sheinbaum, a key

proponent of the judicial overhaul, secured her presidential

victory in June 2024.

That same month was the most brutal for the peso since the

COVID-19 pandemic in 2020, and ratings agency Moody's warned

that the reforms could carry significant implications for the

country's sovereign rating in September.

While Mexican stocks managed to claw back all their

losses from back in June last year, the embattled peso has yet

to stage a similar recovery.

"While the judicial elections stand out for their complexity

and unprecedented scope, markets seem relaxed about their

implications," said analysts at UBS said.

"This is a far cry from the volatility seen post the June

2024 elections."

On the day, Mexican equities advanced 0.49% and were just

off the record high hit in the previous session.

Meanwhile, the peso slipped 0.3%, while the dollar found

fresh impetus overnight after robust U.S. consumer confidence

data.

Investor attention has pivoted to the quarterly results from

AI bellwether Nvidia ( NVDA ) due after the U.S. market close, a

release that may have broader market implications.

Elsewhere, El Salvador's international dollar bonds were

little changed. The International Monetary Fund reached an

agreement with the nation to disburse approximately $120

million, following the successful first review of an ongoing

$1.4 billion, 40-month program.

Equities Latest Daily %

change

MSCI Emerging Markets 1164.66 0.05

MSCI LatAm 2262.19 -0.54

Brazil Bovespa 139125.25 -0.3

Mexico IPC 58878.22 0.49

Argentina Merval 2281801.4 -3.112

9

Chile IPSA 8309.56 -0.51

Colombia COLCAP 1645.21 0.26

Currencies Latest Daily %

change

Brazil real 5.6905 -0.87

Mexico peso 19.3184 -0.3

Chile peso 937.9 -0.1

Colombia peso 4122.73 -0.27

Peru sol 3.64 -0.03

Argentina peso (interbank) 1158 1.04

Argentina peso (parallel) 1150 1.30