BRASILIA: Most Latin American stocks eased on Friday as a stronger-than-expected US jobs report increased expectations of an imminent rate hike by the Federal Reserve, lifting the dollar and dampening appetite for riskier assets.
US job growth accelerated sharply in August while the unemployment rate held steady, pointing to a still stable labor market and keeping an interest rate hike from the Fed this month on the table.
Traders quickly ramped up odds of a September rate hike to 60 percent from about 50 percent a day earlier, according to CME’s FedWatch tool.
“This is a blowout US jobs report that firmly hands the hawks on the FOMC something to chew on,” said Matthew Ryan, head of strategy at Ebury.
“Though with focus firmly on inflation, we’d caution against reading too much into today’s report. Next Friday’s CPI data should carry far more decisive weight, and could prove make-or-break for the September decision.”
The US dollar index recovered some lost ground, pressuring Latin American assets.
Still, regional equities and currencies remained on track for solid weekly gains. Rising crude prices boosted oil-exporting countries, while polls pointing to a tighter Brazilian presidential race also supported sentiment.
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