AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.00 Decreased By ▼ -0.53 (-0.41%)
BOP 6.76 Increased By ▲ 0.08 (1.2%)
CNERGY 4.50 Decreased By ▼ -0.13 (-2.81%)
DCL 8.70 Decreased By ▼ -0.24 (-2.68%)
DFML 41.00 Decreased By ▼ -0.69 (-1.66%)
DGKC 81.30 Decreased By ▼ -2.47 (-2.95%)
FCCL 32.68 Decreased By ▼ -0.09 (-0.27%)
FFBL 74.25 Decreased By ▼ -1.22 (-1.62%)
FFL 11.75 Increased By ▲ 0.28 (2.44%)
HUBC 110.03 Decreased By ▼ -0.52 (-0.47%)
HUMNL 13.80 Decreased By ▼ -0.76 (-5.22%)
KEL 5.29 Decreased By ▼ -0.10 (-1.86%)
KOSM 7.63 Decreased By ▼ -0.77 (-9.17%)
MLCF 38.35 Decreased By ▼ -1.44 (-3.62%)
NBP 63.70 Increased By ▲ 3.41 (5.66%)
OGDC 194.88 Decreased By ▼ -4.78 (-2.39%)
PAEL 25.75 Decreased By ▼ -0.90 (-3.38%)
PIBTL 7.37 Decreased By ▼ -0.29 (-3.79%)
PPL 155.74 Decreased By ▼ -2.18 (-1.38%)
PRL 25.70 Decreased By ▼ -1.03 (-3.85%)
PTC 17.56 Decreased By ▼ -0.90 (-4.88%)
SEARL 78.71 Decreased By ▼ -3.73 (-4.52%)
TELE 7.88 Decreased By ▼ -0.43 (-5.17%)
TOMCL 33.61 Decreased By ▼ -0.90 (-2.61%)
TPLP 8.41 Decreased By ▼ -0.65 (-7.17%)
TREET 16.26 Decreased By ▼ -1.21 (-6.93%)
TRG 58.60 Decreased By ▼ -2.72 (-4.44%)
UNITY 27.51 Increased By ▲ 0.08 (0.29%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 10,450 Increased By 43.4 (0.42%)
BR30 31,209 Decreased By -504.2 (-1.59%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)
Markets

Slowing growth worries hammer Latam assets, Mexico's peso slumps 1%

  • Brazil cenbank considered hiking by more than 100 bps: minutes
  • Mexican cenbank seen hiking by 25 bps on Thursday
  • Chilean peso hits near one-year low
Published September 28, 2021

Latin American stocks joined a broader sell-off in markets on Thursday, driven by uncertainty around economic growth, while surging US Treasury yields weighed on currencies, pushing the Mexican peso down 1%.

Downbeat profit growth at China's industrial firms amid a power shortage there was the latest data set to spook markets amid evidence of slowing growth in the world's second largest economy, a major destination for resource-rich Latam's commodity exports.

MSCI's index of Latam stocks tumbled 2.2%, while its currencies counterpart hit one-month lows.

Brazil's real hit a near six-week low, last trading down 0.7% at 5.417 to the dollar. Minutes of the central bank's policy meeting last week showed it eyed raising the key Selic rate by more than 100 basis points.

Policymakers plan more increases of that size taking rates to "significantly restrictive" levels in order to hit their 2022 inflation target, minutes showed.

Brazil's real outperforms Latam peers

Having begun the year at a record-low 2.00%, the fight against inflation - now over 10% - has seen the benchmark rate rise to 6.25%.

"We see USD/BRL around 5.33 at year-end, but risks are rising toward a weaker currency," said strategists at Citi Research. They see the Selic rate ending the year at 8.25% and peaking at 9.0% in February 2022.

In Mexico, the central bank is seen hiking the benchmark interest rate for the third time in a row by 25 basis points to 4.75% on Thursday as inflation stays above target.

TD Securities head of EM strategy Sacha Tihanyi expects the bank to continue to sound hawkish.

"MXN's carry has helped it to rebound from bouts of weakness in 2021. However, rising US yields will place an additional impetus on Banxico to ensure MXN short-term yields remain competitive, in order to minimize the potential for MXN instability."

On Tuesday, Mexico's peso slumped almost 1% to a one month low.

World's largest copper producer, Chile saw its currency drop to a near one-year low as prices of the red metal ticked lower.

Chile's House of Representatives is set to vote on the fourth pension funds withdrawal on Tuesday. The Chilean economy is expected to grow faster than anticipated, by 9.5% in 2021 from a previous estimate of 7.5%, Finance Minister Rodrigo Cerda said on Monday.

The Santiago government also lifted a state of emergency, put in place due to the pandemic, after successful vaccination campaigns.

Comments

Comments are closed.