Most Latin American stocks rose on Friday after U.S. economic data pointed to the possibility that the Federal Reserve could keep interest rates unchanged. Shares extended their rally after U.S. employment and manufacturing data underscored a strong economy with little wage inflation.
Prices in the U.S. futures markets show traders see no rate hikes ahead by the Fed a day after it said it would be patient with hikes.
”The story being told here is the (U.S.) economy is healthy but inflation continues to face challenges, said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc. This makes even more a compelling argument for the stock market.
Brazil's Bovespa stock index rose half a percent and posted a fourth straight day of gains, while most other regional indexes rose between 0.8% to 0.9%.
World markets that were gaining on strong U.S. job data, turned negative after Amazon's gloomy outlook cut some of Wall Street's gains.
While most other regional currencies eked out gains against a steady dollar, the Brazilian real weakened 0.4% after five straight days of gains as Congress and Senate elections progressed.
Investors were keeping a close eye on elections for leadership in Brazil's congress, with the likely victor in the House, Rodrigo Maia, seen as a known quantity positive for the reform agenda of far-right President Jair Bolsonaro.
There was more uncertainty about the outcome in the Senate, where a close contest was expected between veteran Senator Renan Calheiros and Davi Alcolumbre. While reports said Maia had won the backing of Bolsonaro's Finance Minister Paulo Guedes, others said any of the top candidates were likely to advance a crucial pension reform law.
There are very positive expectations with regard to the candidates' names, a trader with a local bank said. If these expectations are confirmed, there should be a strengthening of the real given the prospects for the pension reform to pick up steam.”