Latam stocks rise; Mexico’s peso muted on recession fears

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* Colombian central bank likely to hold rates * Petrobras shares fall on 2019 production cut * Weak Mexico data stokes recession fears By Agamoni Ghosh July 26 (Reuters) – Latin American stocks rose on Friday, tracking gains on Wall Street that followed reports of robust earnings, while Mexico’s peso slid after weak data stoked fears of a recession. Mexico’s economy, Latin America’s second largest, was flat in May from April and contracted 0.4 percent from May of 2018, the national statistics agency said on Friday. This comes after the International Monetary Fund said earlier this week it expected Mexico’s economy to grow 0.9% this year, below its forecast of 1.6% three months ago. Investors have been spooked by policy misdirection under President Andres Manuel Lopez Obrador and the potentially dire consequences for the country, which is facing a dearth of foreign investment and possible sovereign downgrade by ratings agencies. The peso moved 0.2% lower, while stocks on the IPC index were mostly flat. Colombia’s peso was a touch weaker ahead of a central bank’s meeting, where officials are likely to hold the benchmark lending rate, analysts polled by Reuters said. The bank may, however, change its growth estimate after mixed economic data. “While we doubt that Banrep (Colombia’s central bank) can escape the regional move toward more dovishness, this will be much more a Q4 story than a current one, given that neither growth nor inflation is suggesting any need for imminent action,” said Citi analysts in a note. This week the IMF lowered its forecast for Colombia’s growth, to 3.4% from 3.5%. Brazil’s real moved 0.3% higher, while stocks on the Bovespa index rose marginally as shares of Petroleo Brasileiro fell 1.5% after the state oil company lowered its 2019 production target. Investors are looking forward to the Brazilian central bank’s meeting next week, where, according to a Reuters poll of economists, it is expected to cut its benchmark interest rate to a record low to revive a struggling economy. Key Latin American stock indexes and currencies at 1415 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1049.34 -0.47 MSCI LatAm 2861.94 0.05 Brazil Bovespa 102727.67 0.27 Mexico IPC 40987.37 0.13 Chile IPSA 4987.70 -0.1 Argentina MerVal – – Colombia IGBC 12911.80 -0.2 Currencies daily % change Latest Brazil real 3.7749 0.29 Mexico peso 19.0382 -0.22 Chile peso 698.5 -0.36 Colombia peso 3230.53 -0.35 Peru sol 3.296 0.00 Argentina peso 43.1700 0.53 (interbank) Argentina peso 44.65 0.67 (parallel) (Reporting by Agamoni Ghosh in Bengaluru)

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