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EMERGING MARKETS-Peso hits two-week high on Mexican inflation data
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EMERGING MARKETS-Peso hits two-week high on Mexican inflation data
Jun 24, 2024 8:15 AM

(Updated at 1408 GMT)

*

Brazil's Magalu up on partnership with China's Aliexpress

*

Peru c.bank raises 2024 economic growth forecast to 3.1%

*

Mexico's consumer prices rise in early June

*

MSCI indexes hit two-week highs

*

Latam stocks up 1.8%, FX add 1%

By Johann M Cherian

June 24 (Reuters) - Most Latin American equities and

currencies climbed on Monday, with Mexico's peso among the top

gainers after data pointed to price pressures in the region's

second largest economy ahead of a central bank policy decision

later in the week.

The peso rose 0.8% to a two-week high at 18 against

the dollar, while the yield on 10-year treasury bonds ticked 10

basis points higher after data showed consumer prices increased

0.2% during the first half of June, compared with economists'

forecasts of a 0.1% increase.

The oil exporter's currency had been among the better

performers as the local central bank delayed further interest

rate cuts. However, the incumbent Morena party's recent election

win sparked concerns around possible constitutional reform, with

the peso down nearly 6% year-to-date.

"The combination of a softening economic recovery and tight

financial conditions will likely cap inflation as (the year)

progresses, assuming the (peso) stabilises as we expect," said

Andres Abadia, chief Latam economist at Pantheon Macroeconomics.

Monday's data reinforced expectations that could leave its

benchmark interest rate on hold at 11% later in the week.

"Depreciation will continue to have a direct effect on

inflation and inflation expectations ... making Banxico's Board

members more cautious than they already were," Abadia added.

An index tracking currencies in the resources-rich region

climbed 1% to a two-week high against a

weakening dollar, with Brazil's real up 0.8%.

The market focus will be on U.S. Personal Consumption

Expenditure data for May, the Federal Reserve's preferred

inflation gauge that could influence the outlook for its

monetary policy and consequently policy easing cycles in most

emerging economies.

Peru's sol climbed 0.7% in thin trading. The Peruvian

central bank slightly raised its annual economic growth forecast

to 3.1%, from 3.0% on expectations of greater primary sector

support.

Later in the week, investors will also scrutinise Colombia's

central bank decision, with economists expecting a 50 basis

point cut in its benchmark interest rate to 11.25%. The peso

rose nearly 1% over a one-week high in low volumes.

The currency of the world's largest copper producer, Chile

also ticked up 0.4%.

Among stock markets, MSCI's index tracking regional bourses

rose 1.8% to a two-week high, with Brazil's

Bovespa adding 1.1%.

Among single stocks, Magazine Luiza jumped more

than 11% after the retailer and Chinese e-commerce powerhouse

Aliexpress entered into an agreement for both firms to list and

sell products on each other's platforms.

Mexico's benchmark index was flat as investors await

president-elect Claudia Sheinbaum's additional cabinet

appointees, while Colombia's Colcap rose 0.5%.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1085.58 -0.12

MSCI LatAm 2223.40 1.82

Brazil Bovespa 122749.32 1.16

Mexico IPC 52807.80 0.04

Chile IPSA 6493.86 0.08

Argentina MerVal 0.00 0

Colombia COLCAP 1372.42 0.52

Currencies Latest Daily %

change

Brazil real 5.3806 1.12

Mexico peso 18.0249 0.42

Chile peso 937.5 0.29

Colombia peso 4109.5 0.93

Peru sol 3.7907 0.01

Argentina peso 908.5000 -0.44

(interbank)

Argentina peso 1280 1.95

(parallel)

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