Latin American currencies and stocks experienced muted trading on Monday after recent gains, with Argentina facing significant declines due to a cryptocurrency scandal involving President Javier Milei. The MSCI Latam currencies index rose slightly, while Brazil’s economy showed growth despite interest rate hikes. Geopolitical tensions from ongoing Ukraine discussions also impacted market sentiments, particularly affecting the rouble and bonds.
On Monday, Latin American currencies exhibited muted trading following recent gains. The MSCI Latam currencies index crept up by 0.1%, while stocks experienced a slight uptick of 0.3%. Notably, Argentina suffered a downturn in its markets after President Javier Milei was implicated in a cryptocurrency scandal currently under investigation. Argentina’s benchmark index fell by 5.4%, and hard-currency bonds experienced declines ranging from 0.2 to 2.6 cents on the dollar as calls for impeachment against Milei surfaced.
In the broader context, the MSCI index for Latin American currencies hovered near its highest level since October. Such market activity followed a larger-than-expected decline in U.S. retail sales, which renewed hopes for potential Federal Reserve rate cuts. Simultaneously, Brazil’s economy showed growth in 2024, although the end of the year displayed some slowdown amidst interest rate hikes by the central bank.
Brazil’s real remained stable after reiterations from the central bank regarding an impending interest rate hike. Meanwhile, Chile’s peso experienced a 0.8% decline, breaking a nine-day winning trend due to falling copper prices. The Mexican peso remained flat, while Colombia’s peso dipped slightly as economic growth fell short of expectations, despite a rise in the Colcap index due to better oil prices.
Geopolitical developments are also influencing market behavior; discussions to resolve the ongoing Russia-Ukraine conflict are under scrutiny. As tensions persist, the rouble lost 0.4% against the dollar, and Ukraine’s bonds faced declines. However, optimism concerning an end to the conflict helped bolster European stock indices, even as uncertainty looms over outcome.
The article highlights the varied performances within Latin American markets, particularly the decline in Argentina following a controversial cryptocurrency scandal involving President Milei. It notes overall cautious trading in the context of economic activity, interest rate expectations, and geopolitical tensions impacting investor sentiment. Key trends in currency performance are analyzed alongside broader market reactions to U.S. economic indicators.
Original Source: www.livemint.com
