* Fed seen on lower rate path as wage gains cool * Brazil's consumer prices rise more than expected * Chile's central bank to leave key rate steady, s
* Fed seen on lower rate path as wage gains cool * Brazil’s consumer prices rise more than expected * Chile’s central bank to leave key rate steady, survey says * Latam FX down 1.5%, stocks down 2.5% (Updates prices throughout; adds details, comments) By Ankika Biswas and Shubham Batra March 10 (Reuters) – Latin American currencies and stocks saw their steepest declines in five weeks on Friday as the shuttering of U.S. lender SVB Financial Group dealt a blow to risk appetite, offsetting the dollar’s decline on tempered bets of aggressive Federal Reserve interest rate hikes. The MSCI’s index for Latin American currencies dropped 1.5% while stocks in Latin America lost 2.5%, the biggest one-day fall in five weeks for both. The closure of SVB , the largest bank failure since the 2008-2009 financial crisis, sent a ripple across global markets, particularly the financial sector. That kept emerging assets in the red, despite the dollar dipping 0.6% after U.S. data showed a slowdown in wage growth in February, suggesting easing inflation pressures and boosting bets of a moderation in the Fed’s rate hikes. “On the back of all the SVB debacle, we have seen a little bit of a risk-off on uncertainty with regards to a potential recession,” said Mauricio Une, head of South America macro strategy at Rabobank. The Brazilian real spearheaded the losses among its peers with a 1.4% drop. Consumer prices in Brazil rose slightly more than expected in February, but analysts still predict disinflation is underway. Brazil’s Finance Minister Fernando Haddad also announced that the federal government will provide compensation of $5.2 billion to states for their losses due to reduction of state ICMS taxes. Rabobank’s Une said the focus will remain on the country’s new fiscal framework, which could reveal the sustainability of the fiscal accounts. Among other currencies, the Mexican peso lost 0.6% against the dollar, while Peru’s sol was down 0.2%. Meanwhile, a poll showed that Chile’s central bank is expected to maintain the benchmark interest rate at 11.25% at its next monetary policy meeting in April. However, the Chilean peso was flat. Chilean President Gabriel Boric also named a new foreign minister amid a cabinet reshuffle on Friday. Argentina’s benchmark stock index tumbled 5%. Brazil’s Bovespa lost 1.4%, with retailers Via SA , Magazine Luiza SA and Arezzo dropping sharply following weak results and negative news. Diagnostic services provider Diagnosticos da America SA lost 2.6% on considering a potential follow-on share offering as a way of “strengthening its capital structure”. Elsewhere in emerging markets, Russia’s current account surplus shrank to $12.9 billion in January-February from $37.7 billion in the same period last year, the central bank said on Friday. Key Latin American stock indexes and currencies at 2000 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 955.59 -1.32 MSCI LatAm 2168.69 -2.46 Brazil Bovespa 103600.59 -1.4 Mexico IPC 52764.10 -1.24 Chile IPSA 5393.72 -0.29 Argentina MerVal 235123.49 -5.021 Colombia COLCAP 1191.11 -1.62 Currencies Latest Daily % change Brazil real 5.2094 -1.35 Mexico peso 18.4532 -0.59 Chile peso 795.3 0.00 Colombia peso 4714 0.62 Peru sol 3.7784 -0.21 Argentina peso (interbank) 200.7300 -0.18 Argentina peso (parallel) 369 1.08 (Reporting by Ankika Biswas in Bengaluru; Editing by Paul Simao)
finance.yahoo.com