BRASILIA: Most Latin American assets were mixed on Friday as investors assessed hostilities in the Middle East, but were still headed for weekly gains, as higher commodity prices helped offset inflation concerns.
Attacks by Yemen’s Tehran-backed Houthi militia on vessels in the Red Sea, another major shipping chokepoint, have threatened to further disrupt energy supplies.
Although crude oil eased on Friday, the sustained rise in energy prices is likely to prompt central banks to rethink their monetary policy stance. MSCI’s Latin American currency index ticked 0.1 percent higher and was headed for weekly gains.
The region’s currencies continue to outperform those of broader emerging markets, supported by higher oil prices as Brazil, Colombia are net oil exporters. “In Iran, things are more or less playing out with our baseline, which was for a resolution but continued skirmishes and flare-ups would prevent the price of oil from coming back to pre-war levels… and that really helps (currencies of) countries like Brazil and Mexico,”said Jesse Rogers, head of LatAm economics at Moody’s Analytics, adding that he expects the currencies to remain strong.
The MSCI Latin American equity index fell 0.5 percent, but was up on the week, though regional stock indexes were mixed. Argentine stocks were set to clock their biggest weekly gain in the region despite retreating 0.5 percent on Friday.
Meanwhile, Colombia and the Development Bank of Latin America and the Caribbean (CAF) signed a USD9 billion financing agreement on Friday.
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