EMERGING MARKETS-Mexico, Colombia peso rebound from lows but risks linger

viernes 12 de febrero de 2016 19:39 GYT
 

By Bruno Federowski
    SAO PAULO, Feb 12 (Reuters) - Mexico's peso clawed back
gains from a record low on Friday after brutal losses during the
week as a rebound in oil prices and global stocks lifted
battered Latin American currencies. 
    Solid U.S. consumer data on Friday helped stocks on Wall
Street rebound while oil prices, which have driven the fortunes
of oil producers like Mexico and Colombia, surged back from
12-year lows on a report that suggested OPEC might finally agree
to cut production to reduce the world glut. 
    Colombia's peso also recovered from an all-time low,
but analysts saw the rebound among emerging market assets as
possibly short-lived due to worries about a U.S. recession. 
    Strategists at Citigroup expect concerns about the strength
of the U.S. economy to continue to hurt the Mexican peso, since
Latin America's No. 2 economy sends nearly 80 percent of its
exports to its northern neighbor.   
    "What used to be Mexico's strength - trade linkages with the
U.S. - is now turning into a source of vulnerability as U.S.
recession risks rise," Citigoup strategists wrote in a note to
clients. 
    Mexico's peso  gained 1.3 percent, breaking
back below the 19 per dollar level after hitting its weakest
since a 1993 revaluation on Thursday.  
    Concerns over the global economy persisted ahead of the
reopening of Chinese markets on Monday after a week-long holiday
for the Lunar New Year.
    Many investors who hold Latin American bonds have been
selling the highly liquid Mexican peso to hedge against
further volatility, driving the currency to underperform its
regional peers. 
    The currency has weakened more than 9 percent so far this
year, even more than oil-heavy Colombia's peso, which is
down about 6 percent.
     The Mexico peso's deep losses has fostered talk that the
country's central bank raise might interest rates to try and
support the currency, but Morgan Stanley analysts said in a
client note the central bank is more likely to hold additional
dollar sales.
    Mexican Finance Minister Luis Videgaray said on Friday that
Mexico planned to continue selling up to $400 million a day in
auctions. But he said authorities were closely watching and
could change the regime "if conditions change."
    The Chilean central bank left its benchmark rate at 3.50
percent Thursday but indicated further hikes are probable as the
Chilean peso hovers near 13-year lows. The Chilean peso
firmed sharply. 
    Brazil's Bovespa benchmark stock index rose as
higher oil prices lifted shares of state-controlled oil company
Petroleo Brasileiro SA.
    
    Latin American stock indexes and currencies at 2300 GMT:
    
    
 Stock indexes                       daily %    YTD %
                            Latest    change   change
 MSCI Emerging Markets       711.24    -0.25   -10.44
                                              
 MSCI LatAm                 1688.04     0.93    -7.75
                                              
 Brazil Bovespa            39808.05     1.25    -8.17
                                              
 Mexico IPC                42416.44     0.13    -1.31
                                              
 Chile IPSA                 3667.47     0.45    -0.35
                                              
 Chile IGPA                18031.60     0.47    -0.66
                                              
 Argentina MerVal          11276.39     2.41    -3.42
                                              
 Colombia IGBC              8799.16     0.88     2.95
                                              
 Venezuela IBC             14704.83     0.76     0.80
                                              
                                                     
 Currencies                          daily %    YTD %
                                      change   change
                             Latest           
 Brazil real                 3.9889    -0.17    -1.05
                                              
 Mexico peso                18.9105     1.29    -8.89
                                              
 Chile peso                  704.38     1.16     0.76
                                              
 Colombia peso                 3382     1.67    -6.29
                                              
 Peru sol                    3.5062    -0.06    -2.63
                                              
 Argentina peso             14.7200    -0.54   -11.80
 (interbank)                                  
                                              
 Argentina peso                14.9    -2.68    -4.23
 (parallel)                                   
                                              
 
 (Reporting by Michael O'Boyle in Mexico City and Bruno
Federowski in Sao Paulo; Editing by Tom Brown)