EMERGING MARKET: Latam FX Gains; Mexican Inflation Surges

  • In 2021, consumer prices for the Mexicans have surged by a total of 6.24 percentage points in this month of October
  • Stocks have plunged as the three weeks hit approaches Brazil
  • The liberal party will be seeing a new member that is Bolsonaro

On Tuesday, The Mexican peso seems to be ready for the season surge of interest rate that it will be seeing in the coming weeks. Pesos are stable and solidified for now, but one can not guess how long it will stay like this. Brazil, on the other hand, had one percentage point as real revitalization against the one dollar, which has succeeded in keeping its consistency. The Latam FX Gains this week.

The Central Bank’s target is about 3.14 percentage points, and in October, the consumer prices have seen a rise of about 6.24 percentage points which is almost double the Central Bank’s 3.14 percentage points. This will lead to the hike in interest rate for the fourth time later this week.

Mexico’s central bank, which is known locally as Banxico, will likely raise its benchmark interest rate by 25 basis points to 5% on Thursday, according to a Reuters poll. Some also forecasted a larger hike.

Elisabeth Andreae, who is an analyst at Commerzbank, wrote that 50 bp rate steps are pointed, as the 100 bp rise in the prices of the swap market is noted. This will be seen until the end of this year, 2021. Rates increased considerably last week in a Fed meeting, and now, for the Bank of Mexico, a further hike is expected.

President Jair Bolsonaro is trying his best to overcome these highs. He ordered the lawmakers to let the government use the money for creating charity and welfare programs next year. This would be carried out during the election campaign, so that is why he is pushing the government to make amendments as soon as possible. Brazil has hit itself with such a loss that it is now three weeks high at least.

President Jair Bolsonaro is no longer people’s favorite because of the decisions he has made so far. Next year he plans on switching parties, and he will be joining the Liberal Party.

In the spotlight with all the attention, the Sao Paulo-listed stocks met an increase of about 1.54 percentage points.

Banco do Brasil SA, a lender controlled by the state, met with an unexpected increase of 2.4 percentage points. This rise is usually seen when a healthy step is taken by the officials, and the same happens with Banco do Brasil SA. They decided that the Bank would be allowing the people to have loans, These loans will be in good amounts that will be risky for the time being, but in the coming times, it will prove to be beneficial and profitable.

Banking and Trading Group BTG Pactual SA saw an unexpected increase too of about 2.8 percentage points. This gain through the total income of the third quarter was not according to the expectations of the researchers and experts. On the other hand, 0.6 percentage point of decrease was seen in the

Airline Gol. This is bad news as it had already previously lost about 160.54 million dollars or 884.6 million reais, and with another loss that was even more than it was before the pandemic. They were probably expecting a rise because now the covid restrictions are wearing off, but with these markets, it is hard to predict anything and carries a lot of risks.

On Wednesday, the Federal Reserve has reported announcing the data of inflation. This data will help the investors to make an educated guess about when the interest rates can see a rise. While all the other currencies have seen fluctuations, the dollar remained solid and stable in its place. It was previously a little shaken up, but it stayed stable now, and it seems like it will stay this for some time now.

Copper is found abundantly in Chile, and Chile is the world’s top exporter of copper. The copper prices were seen to increase in the past months, which caused Chile to gain 0.7 percentage points against the dollar. This was considered to be a piece of good news for Chile until it had to cut down on its investments in mining as there was a removal of two projects. This cut would be almost 6.9 percentage points through the year twenty-thirty. Before this, for a whole month and even more, a stable 795.73 rise was seen by Chile.

There have been notably some irregularities seen in the mining firm sales, and Because of these irregularities, President Sebastián Piñera has been called out. He will have to present to Senate against these accusations after its approval by the lower chambered deputies. This will take place in sensitive times of presidential elections, just a few weeks before elections.

( Latam FX Gains ) Indexes of Latin American stocks and currencies at 1426 GMT:

Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1275.16                0.5
 MSCI LatAm                    2194.17                         1.57
 Brazil Bovespa              106395.00                        1.54
 Mexico IPC                          –         –
 Chile IPSA                    4343.47                              -0.45
 Argentina MerVal             96238.98                          0.202
 Colombia COLCAP               1394.23                            0.41
       Currencies             Latest    Daily %
 Brazil real                    5.4942                                      0.85
 Mexico peso                   20.2830                            0.18
 Chile peso                      797.6                                       0.49
 Colombia peso                 3872.53                               0.05
 Peru sol                       4.0045                                     -0.03
 Argentina peso               100.0600                                    0.02

The table above provides the currencies and stock indexes of Latin Americans and Latam FX Gains. Through this table, it has been made clear that the MSCI LatAm goes through the most daily changes and fluctuations. After that comes Brazil Bovespa with a daily fluctuation percentage point of about one point fifty-four.

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