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EMERGING MARKETS-Brazil real surges, Mexican peso at 2-week highs

    * Mexican peso extends winning streak to fourth day
    * Brazil services sector expands in Sept for first time
since Feb 
    * Most Latam assets higher after oil prices surge over 6%

 (Updates prices throughout; Adds comments, bullets)
    By Shreyashi Sanyal
    Oct 5 (Reuters) - The Brazilian real surged on Monday,
rebounding sharply from declines last week after signs of
improvement in the country's services sector, while Mexico's
peso rose as its government presented an almost $14 billion
infrastructure investment plan.
    The real jumped 2% after a purchasing
managers' survey showed domestic services sector expanded in
September for the first time in seven months.      
 
    Analysts at BofA Global Research continued to see activity
improving in Brazil, especially in the housing sector. 
    For all of Latin America, BofA analysts expect volatility to
build during the fourth quarter as headlines are filled with
updates on U.S. elections, possible new waves of coronavirus and
vaccines. 
    Brazil's government will on Wednesday reveal how it plans to
fund its new social welfare program Renda Cidada, Senator Marcio
Bittar said, adding that the proposal will respect the
administration's key fiscal spending cap rule.
    Mexico's peso strengthened 1%, to its highest level
in more two weeks as the investments worth over 297 billion
pesos ($13.83 billion) is the first concrete sign of a renewed
readiness by corporate bosses to invest under President Andres
Manuel Lopez Obrador.
    "This signals the government's ability to act on national
priorities," said Horacio Carias, senior quantitative portfolio
manager at Orion Portfolio Solutions.
    "All in all, these are strong signs that the Mexican
government is serious about creating the right environment for
growth and that should benefit the relative value of the peso."
    Mexico's currency has lost 11.5% so far in the year, faring
somewhat better than its peers, in part because of the strong
connection with the U.S. economy, its main trading partner.
    The peso remains exposed to volatility leading up to the
Nov. 3 U.S. elections.
    Stocks on Wall Street rose sharply as investors viewed more
fiscal stimulus as likely and after news U.S. President Donald
Trump will leave the hospital where he is being treated for
coronavirus.
    Most major currencies in the region rose as global risk
sentiment improved, with the MSCI's index for Latin American
currencies rising 1.2%.   
    Oil exporter Colombia's peso advanced as crude prices
surged more than 6%, while the Chilean peso bucked the
day's trend among peers to fall 1% as prices of its no.1 export,
copper, fell.   
    Latin American stocks also rose, with Brazil's Bovespa
leading gains as it jumped over 2%. 
        
    Latin American stock indexes and currencies:
    
           Stock indexes                   Latest   Daily %
                                                    change
 MSCI Emerging Markets                     1092.96     1.04
 MSCI LatAm                                1867.48     2.76
 Brazil Bovespa                           96125.92     2.24
 Mexico IPC                               36725.31     0.23
 Chile IPSA                                3675.83     0.27
 Argentina MerVal                         44288.37    1.452
 Colombia COLCAP                           1168.04     0.26
                                                           
              Currencies                   Latest   Daily %
                                                    change
 Brazil real                                5.5640     0.05
 Mexico peso                               21.3890     1.03
 Chile peso                                  797.4    -1.08
 Colombia peso                             3827.84     1.09
 Peru sol                                   3.5877     0.84
 Argentina peso (interbank)                77.0100    -0.08
                                                    
 Argentina peso (parallel)                     146     2.74
                                                    
 
    
 

 (Reporting by Shreyashi Sanyal in Bengaluru; editing by Grant
McCool and Cynthia Osterman)
  
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