An index tracking Latin American stocks was on track to log its biggest one-week jump in more than two years, on expectations of a possible thaw in a trade war between the U.S. and China, while investors assessed data and corporate earnings across the region.
The MSCI gauge for Latin American stocks (.MILA00000PUS) was flat on Friday, as investors paused after a rally earlier in the week which put the index on track for its largest weekly gain since December 2022.
Investor sentiment showed signs of improving after reports on trade deal talks between Beijing and Washington. Data from Citigroup showed emerging markets funds posted inflows of $1.1 billion this week, with those into China alone standing at $1.3 billion.
"Progress is slow and remains fragile, but it seems there is a possibility that the worst will be avoided," analysts at Societe Generale said in a note.
Earlier in the day, China exempted certain U.S. imports from its towering 125% tariffs and invited businesses to propose more goods that they want to receive relief on, according to businesses notified.
Separately, U.S. President Donald Trump told TIME magazine in an interview that U.S.-China talks were taking place on tariffs. Beijing has so far disputed the U.S. characterization of talks.
Investors are concerned that an impasse between the world's two biggest economies could weigh on global growth as reflected by officials from the International Monetary Fund and the World Bank throughout the week.
Mexico's benchmark index BMV:ME inched up 0.1% and was on track for its biggest weekly rise since January 2023 of more than 6% - the most among regional peers as investors focused on corporate earnings. The country's assets have also benefited from stabilizing relations with its northern neighbor.
Grupo Mexico BMV:GMEXICO/B lost 0.8%. The mining and transport conglomerate reported a 17% increase in its net profit during the first quarter.
The peso FX_IDC:USDMXN was flat but is set to mark a third consecutive week of gains. Data showed the Mexican economy grew 1% in February on a monthly basis, at a time when markets anticipate the Banxico will continue cutting interest rates.
More broadly, a Latam currencies gauge (.MILA00000CUS) was on course for its strongest weekly performance since August 2024, but was flat during the session, reflecting persisting caution.
Resources-rich Latin American economies are dependent on revenues from commodities exports, demand for which could take a hit in a global recession environment.
Brazil's Bovespa index BMFBOVESPA:IBOV dipped 0.2%, with miner Vale BMFBOVESPA:VALE3 falling 1.9% after reporting a decline in its first-quarter net profit.
Brazilian funds witnessed $400 million worth of outflows this week - their largest outflows in about a year, according to Citigroup.
On Friday, the real FX_IDC:USDBRL was muted and on track for its second-straight week in advances.
Data showed annual inflation sped up in line with market expectations in early April, stoking expectations that the domestic central bank will hike interest rates.
Chile's peso FX_IDC:USDCLP slipped 0.4% ahead of a credit rating review by Moody's.
Argentina's peso FX_IDC:USDARS slipped by 0.4%, on course for a second week of decline following the central bank's recent decision to allow it to trade within a controlled range.
A broader emerging market equity index CBOE:EFS has recovered all its losses incurred since Trump unveiled steep duties on world economies earlier this month.
Elsewhere, Sri Lankan bonds (XS2966242096=TE), (XS2966242179=TE), (XS2966241361=TE) gained more than 1 cent each after the IMF said it reached a reached a staff-level agreement with island nation.
Key Latin American stock indexes and currencies at 1415 GMT:
Latin American market prices from Reuters
Equities
Latest
Daily % change
MSCI Emerging Markets CBOE:EFS
1096.14
0.29
MSCI LatAm (.MILA00000PUS)
2186.34
-0.03
Brazil Bovespa BMFBOVESPA:IBOV
134322.09
-0.19
Mexico IPC BMV:ME
56431.42
0.09
Chile IPSA BCS:SP_IPSA
7999.89
0.02
Argentina Merval BCBA:IMV
2232745.13
NULL
Colombia COLCAP BVC:ICAP
1632
-0.15
Currencies
Latest
Daily % change
Brazil real FX_IDC:USDBRL
5.6871
-0.08
Mexico peso FX_IDC:USDMXN
19.5893
-0.05
Chile peso FX_IDC:USDCLP
937.1
-0.37
Colombia peso FX_IDC:USDCOP
4237.1
0.41
Peru sol FX_IDC:USDPEN
3.6749
-0.11
Argentina peso (interbank) FX_IDC:USDARS
1180
-0.43
Argentina peso (parallel) (ARSB=)
1200
2.04