EMERGING MARKETS-Mexico, Brazil currencies drop on U.S. data

viernes 5 de febrero de 2016 19:57 GYT
 

By Bruno Federowski
    SAO PAULO, Feb 5 (Reuters) - Mexico's peso and Brazil's real
slumped on Friday after data showed a pickup in U.S. wages in
January that backed the view that the Federal Reserve could
raise U.S. rates again this year.
    Tightening financial market conditions and signs that both
the U.S. and global economies were slowing had undercut the case
for a Fed rate hike next month and lowered the probability of
monetary policy tightening this year.
    But a quicker pace of rate increases stokes pressure on
emerging market currencies that suffer outflows triggered by
higher interest rates in the world's largest economy.
    In Mexico, the local stock index ended 1.19 percent
lower and the peso fell 0.90 percent despite three
auctions in which the central bank sold $356 million to support
the currency. 
    The Brazilian real bid down 0.42 percent ahead of the local
Carnival holiday. Brazilian markets will be closed Monday and
Tuesday and will reopen on Wednesday.
    Data showed a lower U.S. unemployment rate in January and
higher wages. Some traders said the figures put a 2016 interest
rates increase back on the table, which could draw funds away
from high-yielding emerging market assets. 
    "Although there is more talk of recession in the U.S., this
is still not the kind of data one associated with an economic
contraction," BBH analysts wrote in a client note.
    "While we have doubted the Fed's four-hike call, we think
the market is similarly extreme in not fully pricing in a single
hike this year."
    
    Latin American stock indexes and currencies at 2110 GMT:
       Stock indexes           Latest     Daily pct
                                            change
 MSCI Emerging Markets            738.50       -0.14
                                          
 MSCI LatAm                     1,751.96        -1.8
                                          
 Brazil Bovespa                40,592.09       -0.56
 Mexico IPC                    43,229.67       -1.19
 Chile IPSA                     3,656.44       -0.27
 Chile IGPA                    17,984.74       -0.23
 Argentina MerVal              11,400.34       -0.18
 Colombia IGBC                  8,706.71        0.43
 Venezuela IBC                 14,372.64       -2.03
                                                    
         Currencies            Latest     Daily pct
                                            change
 Brazil real                      3.9093       -0.42
 Mexico peso                     18.4425       -0.90
 Chile peso                        704.7       -1.06
 Colombia peso                  3,331.61       -0.53
 Peru sol                         3.4802       -0.12
 Argentina peso (interbank)      14.3600       -0.84
                                          
 Argentina peso (parallel)         14.21        0.35
                                          
 
 (Reporting by Bruno Federowski, Jean Luis Arce, and Paula Arend
Laier; editing by G Crosse)