Latin American stocks and currencies roared higher on Monday, with Brazil shares rising 3.5% as commodity prices surged on hopes of economic recovery as countries eased pandemic-induced lockdowns.
Encouraging data from a COVID-19 vaccine trial by U.S. drug-maker Moderna added to the optimism, bolstering Wall Street's rally. Despite worrying rises in the number of new cases in emerging markets, especially Brazil, and simmering U.S.-China trade tensions, an index of Latam stocks jumped 4.3%. Its currency counterpart surged 1% after both indexes ended lower last week.
Oil firms Petrobras and Ecopetrol climbed between 3.1% and 7.2% as crude prices rose, while iron ore miner Vale rallied 6.3% for its best day in 10 months.
Currencies of oil exporters Brazil, Mexico and Colombia firmed between 1.3% and 1.5%, with the Mexican peso touching a more than four-week high.
Chile, the world's largest producer of copper, saw its peso climb 1%, while stocks were on track for their biggest one-day gain in three weeks. Copper prices surged almost 2%.
Outbreak hot-spots such as Italy reopened shops and restaurants, while New York and Spain plan to lift restrictions gradually. In Mexico, automotive, mining and construction sectors will be told in 72 hours if they can resume operations the government said.
But the regional picture remained grim, with a central bank survey showing Brazil's economy is expected to shrink by more than 5% this year.
The political scenario in Brazil remained precarious too, with health minister Nelson Teich resigning on Friday, as he and President Jair Bolsonaro showed themselves increasingly out of step, with Bolsonaro calling for a rollback of state quarantines and for the widespread use of unproven drugs, such as chloroquine, to fight the virus.
This increases uncertainty about how the pandemic will develop in Brazil and how it will affect the economy, and the BRL is therefore likely to remain under depreciation pressure for the time being, said Commerzbank analyst You-Na Park-Heger.
Teich is the second minister to leave a post in Bolsonaro's government after Justice Minister Sergio Moro quit last month over differences with the president.
Argentina's peso marked a fresh low against the dollar with risk of a sovereign debt default looming. Argentina received three new counter-offers from creditors late on Friday with the deadline to restructure US$ 65 billion in foreign debt lapsing on Friday.
We believe the authorities will continue to signal progress in the negotiations, with talks continuing after the aforementioned deadline, to limit the economic impact of a default, said analysts at Citi Research.