EMERGING MARKETS – Brazil leads Latham in lower value trading

Shreiashi Sanial, Dec 26 (Reuters) – Brazilian shares and the real fell on Monday, leading regional rivals to fall as trading remained weak in the final week of a year in which Latin American assets outperformed most other markets in development. The Brazilian real fell 0.6% against the dollar, while Sao Paulo shares fell 0.7%. MSCI’s index of Latham shares fell 1.3% but was set to rise close to 2% in 2022. A broader index of emerging market shares has fallen more than 22% for the year, with many market players pointing to a large exposure to Latin American commodities as one of the factors driving performance. “Economies (in Latham) have rebounded strongly from the Omicron wave, a spike in commodity prices following Russia’s invasion of Ukraine has boosted the region’s exports and economies have been more resilient to high interest rates than we thought,” said Kimberly Sperfechter, Emerging Markets . economist at Capital Economics. However, Sperfechter warned of stable inflation in the region and tighter monetary policy, “although central banks in Latin America will likely be among the first to cut interest rates next year, they will generally do so only gradually and rates will remain in restrictive territory throughout time of years.” The Chilean peso fell 0.1%. A survey of traders showed Chile’s central bank is expected to keep its benchmark interest rate at 11.25 percent at its January meeting, ahead of a easing cycle that would lift rates to 6.5 percent within 12 months. Inventories in the region fell 0.4%. The Mexican peso fell 0.2%, but the Colombian peso and Peruvian sol rose 0.1% and 0.3%, respectively. Trading volume likely to be lower today as US and European markets are closed on Monday for the long Christmas holiday weekend.In other EM, the Turkish lira briefly touched a record low of 18.8440 against the dollar early, paring its losses this years from carried 30%, after a period in which Ankara followed a policy of tightly controlling the exchange rate. Key Latin American Indices and Currencies at 1552 GMT: Latest Log% Change MSSCi Markets 2163.09 -1.42 Brazil Bovespa 1063.09 -1.42 Mexico IPC 50611.56 0.07 Chile IPSA 5233.88 -0.41 Argentina Merval 190627.05 1.514 Colombia Colcap 1248.75 -0.31 Brazilian Real 5 Daily Change % 1952 -0.59 Mexican peso 19.3800 -0.19 Chilean peso 878.3 -0.01 Colombian peso 4728 0.01 Peru sol 3.8123 -0.15 Argentine peso (interbank peso23) 105,010 Argentine peso (interbank peso) 3 Re.5 175.0 Bengaluru; Editing by Chizu Nomiyama)

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