EMERGING MARKETS-Latam currencies fall on commodities slump, U.S. rate hike speculation

jueves 24 de marzo de 2016 12:35 GYT
 

By Bruno Federowski
    SAO PAULO, March 24 (Reuters) - Latin American currencies
weakened across the board on Thursday on lower commodity prices
and heightened speculation that a Federal Reserve interest rate
hike could come as early as next month.
    St. Louis Federal Reserve President James Bullard joined a
chorus of policymakers highlighting the odds that the U.S.
central bank could increase rates at least twice this year.
    Bullard said another hike "may not be far off," leading some
to speculate that a move could take place as soon as April. Some
traders believed he meant to shift bets in financial markets,
which currently imply a single rate increase this year.
 
    Higher U.S. rates could draw funds away from emerging
markets, which now benefit from a wide interest rate spread. A
stronger U.S. dollar also weighed on raw material prices,
depressing the currencies of major commodity exporters.
    That hurt currencies such as copper-rich Chile's peso
, while the Mexican peso  followed crude
prices lower. Record high U.S. crude stockpiles also helped drag
oil prices toward their first weekly loss in over a month.
    Volumes were thin ahead of the Easter holiday, with
Colombian markets closed for Holy Thursday. 
    In Brazil, traders were also cautious ahead of expected
developments in the country's worst political crisis in two
decades.
    "We have plenty of reason to take the foot off the gas
pedal," said Paulo Celso Nepomuceno, a fixed-income strategist
with the Coinvalores brokerage in São Paulo.
    The biggest party in President Dilma Rousseff's
congressional coalition could decide to jump ship next Tuesday,
possibly heightening the chances of her ouster.
    Shares of state-controlled companies Petroleo Brasileiro SA
 and Banco do Brasil SA, seen as key gauges
of political tensions, both fell on profit-taking after a huge
rally this month.
    Shares of Oi SA rose after the company, Brazil's
most indebted telecommunications firm, posted a widely expected
quarterly loss, which was about the same as a year earlier.
 
    A source told Reuters on Thursday the company's bondholders
have hired Moelis & Co to represent them in debt
restructuring talks. 
    
    Key Latin American stock indexes and currencies at 1545 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
                                    Latest             
 MSCI Emerging Markets                812.81    -1.08     3.47
 MSCI LatAm                          2072.22    -1.08    14.49
 Brazil Bovespa                     49103.57    -1.18    13.27
 Mexico IPC                         45647.57     0.03     6.21
 Chile IPSA                          3876.47    -0.58     5.33
 Chile IGPA                         19016.92    -0.52     4.77
 Argentina MerVal                   12499.17     -3.3     7.06
 Colombia IGBC                       9758.46     0.15    14.17
 Venezuela IBC                      14957.41     0.04     2.53
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                                       
                                      Latest           
 Brazil real                          3.6895    -0.38     6.98
 Mexico peso                         17.6375    -0.28    -2.31
 Chile peso                            680.8    -0.41     4.25
 Argentina peso (interbank)          14.4900    -0.69   -10.40
                                                       
 Argentina peso (parallel)             15.25     0.59    -6.43
                                                       
 

 (Reporting by Bruno Federowski; Additional reporting by Paula
Laier; Editing by W Simon)