EMERGING MARKETS-U.S. interest rate outlook sinks Latam markets

viernes 22 de mayo de 2015 11:57 GYT
 

SAO PAULO, May 22 (Reuters) - Latin American currencies and
stocks weakened across the board on Friday, after U.S. inflation
data stoked investors' expectations that interest rates in the
world's largest economy will be hiked sooner rather than later.
    Nearly every currency in the region weakened against the
dollar, while the MSCI Latin American stock index
 dropped to its lowest level in a month.
    The U.S. Consumer Price Index, stripped of volatile food and
energy components, notched a 0.3 percent core rise in April
according to data released Friday, with prices increasing across
a broad spectrum of items. 
    Federal Reserve Chair Janet Yellen is set to discuss the
prospects for the U.S. economy later on Friday. Interviews with
current and former officials at the U.S. central bank suggest
that policymakers do not need much more evidence that the
economy can withstand a modest initial rate rise by September.
 
    Expectations of higher U.S. interest rates tend to weaken
demand for higher-risk assets, such as Latin American
securities.
    The Brazilian currency, the real , touched its
weakest level in ten days, with traders awaiting the formal
announcement of the government's expected 70 billion reais ($23
billion) budget freeze later in the session. 
    Brazil's improved fiscal management makes a sovereign credit
downgrade less likely and boosts the outlook for the real,
though political wrangling threatens to limit the scope of that
initiative.
    Data on Friday showed Brazil's annual inflation rate
remained at an 11-year high in mid-May, putting additional
pressure on the central bank to hike interest rates.
    Yields on Brazilian interest rate futures <0#DIJ:>,
meanwhile, climbed across the shorter end of the yield curve.
    Chile's peso weakened, dragged down by lower prices
for copper, the country's main export. Mexico's peso
 also fell.
    In equities markets, Brazil's Bovespa stock index 
fell for the fourth session in five, contributing to a decline
of about 4.9 percent on the week - the biggest weekly drop in
the index since mid-December.
    Most of that decline was caused by bank shares, which sank
due to recently-announced changes in income tax rules.
 
    
    Key Latin American stock indexes and currencies at 1531 GMT:
    
 Stock indexes              Latest         Daily   YTD pct
                                             pct    change
                                          change  
 MSCI Emerging Markets        1,037.22      0.44      7.99
                                                  
 MSCI LatAm                   2,611.58      -1.6      -2.7
                                                  
 Brazil Bovespa              54,312.35     -1.45      8.61
 Mexico IPC                  45,016.52     -0.18      4.34
 Chile IPSA                   4,050.78     -0.18      5.19
 Chile IGPA                  19,670.93     -0.15      4.24
 Argentina MerVal           11,483.069     -1.85     33.85
 Colombia IGBC                10,587.4     -0.02     -9.00
 Peru IGRA                 -            -            -
 Venezuela IBC                7,339.07     10.79     90.19
                                                          
 Currencies                     Latest     Daily   YTD pct
                                             pct    change
                                          change  
 Brazil real                    3.0657     -0.77    -13.32
 Mexico peso                   15.2873     -0.45     -3.55
 Chile peso                      608.2     -0.61     -0.30
 Colombia peso                 2,499.5     -0.75     -4.46
 Peru sol                       3.1471     -0.13     -5.34
 Argentina peso                 8.9675      0.00     -4.66
 (interbank)                                      
 Argentina peso                  12.57      0.56     11.38
 (parallel)                                       
 
 (Reporting by Asher Levine, editing by G Crosse)