August 2, 2019 / 2:53 PM / 19 days ago

EMERGING MARKETS-Latam forex falls as investors avoid riskier assets on trade fears

    * Petrobras posts its highest ever quarterly profit
    * Latin American currencies worst day in 2019 
    * EM stocks on biggest slide since December 2015

    By Agamoni Ghosh
    Aug 2 (Reuters) - Latin American currencies fell on Friday
as U.S.-China trade tensions pulled investors away from riskier
assets, but a smashing quarter from Brazilian state-run oil firm
Petrobras helped Brazil stocks outperform regional indices. 
    U.S. President Donald Trump vowed to hike tariffs on Chinese
imports starting on Sept. 1 on Thursday, a day after negotiators
from both countries concluded a meeting in Shanghai without
significant signs of progress to end a trade war.  
    Emerging market assets, already reeling from the U.S.
Federal Reserve's hawkish rate-cut outlook earlier this week,
fell to near two-month lows, with Latin American currencies
 on course to post their worst week for 2019.
    "While Trump has not closed the doors for more talks ... we
do not expect a trade deal between the U.S. and China to
materialize," said Piotr Matys, Rabobank emerging markets FX
strategist.  
    "Even if an agreement is reached, it is likely to be weak
and unsustainable as China will be reluctant to implement
required structural reforms to satisfy the U.S." 
    Stocks in the region fell across the board but Sao Paulo's
Bovespa stocks bucked the trend after Petrobras
 posted its highest ever quarterly profit, credited in
large part to billions of reais in asset sales.
    Shares of state-run power company Eletrobras rose 3.5% 
after President Jair Bolsonaro approved its privatization plan.

    Mexico's IPC index was at its lowest level since May,
while stocks in Chile were on track to post their
third consecutive session of losses.        
    Chile's peso fell 0.6%, partly hurt by a dip in
copper prices, its main export. 
    Minutes released from the central bank's recent meeting
showed policymakers in Chile considered cutting the benchmark
interest rate, but ultimately opted to maintain it, citing a
"relatively limited benefit."
    Chile, the world's top copper producer has shown a
below-expected economic performance, in part due to weaker
mining activity and the impact the U.S.-China trade dispute has
had on the price of the metal. 
    
  Key Latin American stock indexes and currencies at 1435 GMT 
    
 Stock indexes                              daily % change
                          Latest           
 MSCI Emerging Markets            1002.73            -2.13
                                           
 MSCI LatAm                       2747.48            -1.72
                                           
 Brazil Bovespa                 101867.11            -0.10
                                           
 Mexico IPC                      39852.59            -1.22
                                           
 Chile IPSA                       4888.80            -1.05
                                           
 Argentina MerVal                40727.38             -1.6
                                           
 Colombia IGBC                   12484.52            -0.27
                                           
                                                          
 Currencies                                 daily % change
                                   Latest  
 Brazil real                       3.8820            -0.91
                                           
 Mexico peso                      19.3113            -0.41
                                           
 Chile peso                         710.7            -0.61
                                           
 Colombia peso                    3364.48            -0.77
 Peru sol                           3.339            -0.39
                                           
 Argentina peso                   44.6800            -0.65
 (interbank)                               
                                           
 

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Susan Thomas)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below