* Dollar sinks after U.S. jobs data * Petrobras slips on dividend suspension request * IMF sees Mexico’s economic growth slowing * Copper prices up on Peru’s output disruption * Colombia’s Congress approves tax reform bill (Adds details, updates price throughout) By Susan Mathew and Ankika Biswas Nov 4 (Reuters) – Most emerging market currencies and stocks marched north on Friday, as risk assets caught a bid following U.S. jobs data, coupled with hopes of easing COVID-19 curbs in import-oriented China. Leading currency gains were Brazil’s real, up nearly 2%, while the Chilean peso added 1.9% to hit a three-week high. Peru’s sol gained 0.2% and Mexico’s peso rose 0.6% to a five-month high. The dollar shed as much as 1.8% after a slowing pace of U.S. jobs growth and a rising unemployment rate indicated some loosening in labor market conditions, aiding hopes of a shift towards smaller interest rate hikes starting in December. “There is offsetting dynamics that are unfolding within the U.S. labor market report,” said Brendan McKenna, international economist and FX strategist at Wells Fargo. “The establishment survey was relatively strong, but the household survey showed a pretty large decline in jobs. I think the Fed is probably a little bit more focused on the household survey at the moment, and that’s kind of resulting in some broad dollar weakness and foreign currency, especially EM currency, strength.” A broader index of emerging market stocks rose 1% and was set for weekly gains of 5%, its best week in over two years. The MSCI Latin American stock index jumped nearly 3% following a strong handover from emerging market peers earlier in the day due to hopes of easing COVID-19 curbs in China and optimism around U.S.-China relations. McKenna expects the Fed to deliver a 50 basis points hike in December and shift to a slower pace in early 2023. Risk assets took a hit earlier this week after the Fed struck a hawkish tone, quashing hopes of a dovish pivot and raising bets for a higher terminal interest rate. Brazil’s benchmark stock index Bovespa advanced 1.6% and saw weekly gains of 3%. However, Petrobras lost over 4% after Brazil’s audit court prosecutors requested the suspension of a dividend payout from the state-run oil company. Mexican stocks rose 1.67%, touching their highest level since June. The International Monetary Fund said Mexico was well-placed to navigate a turbulent global environment, despite forecasting slower economic growth in the near term. Further, copper prices rebounded on Friday as production disruptions in Peru, the world’s second-largest copper producer, sparked fresh concerns over supply of the metal against thin inventories. Colombia’s Congress on Thursday approved a tax reform bill that will raise an additional 20 trillion pesos ($4 billion) annually for the next four years partly through increased duties on oil and coal. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 887.79 3.12 MSCI LatAm 2371.19 2.83 Brazil Bovespa 118646.06 1.5 Mexico IPC 51052.73 1.67 Chile IPSA 5207.28 0.52 Argentina MerVal 151075.58 0.415 Colombia COLCAP 1230.62 1.24 Currencies Latest Daily % change Brazil real 5.0247 1.91 Mexico peso 19.5224 0.58 Chile peso 927 1.86 Colombia peso 5087 -0.57 Peru sol 3.9511 0.18 Argentina peso (interbank) 158.2800 -0.22 Argentina peso (parallel) 285 0.70 (Reporting by Susan Mathew in Bengaluru; Editing by Chris Reese)
Source: news.google.com
