By Niket Nishant and Pranav Kashyap
Latin American assets snapped back into the green on Monday, recovering from last week's bruising losses and as commodity prices gained, even though some caution prevailed as investors were on the lookout for any signs of trade friction between the and .
MSCI's gauge for Latin American currencies (.MILA00000PUS) gained 1.1%, while a parallel index tracking regional currencies (.MILA00000CUS) was up 0.2% against the dollar TVC:DXY.
Investor sentiment showed signs of stabilizing after the indexes logged their biggest weekly declines since early July following U.S. President threat to ramp up on imports from China on Friday.
However, Trump eased his tone over the weekend and Treasury Secretary Scott Bessent said on Monday that the U.S. president was set to meet Chinese leader Xi Jinping in in late October and said "the 100% tariffs on China does not have to happen."
A flare-up could further complicate the outlook for investors who have been recovering from market ructions when Trump imposed tariffs on world economies in April.
"While we have largely moved on from the tariff tantrum of April, Friday's market decline is an important reminder that trade tensions are still in the background and can cause bouts of short-term volatility," said Richard Saperstein, chief investment officer, Treasury Partners.
The Brazilian real FX_IDC:USDBRL firmed 1.3% against the dollar, tracking higher iron ore prices - a top export item from the country, while oil exporter peso FX_IDC:USDMXN appreciated 0.8% as oil prices gained.
The Brazilian President said he would announce his nomination for the next judge to sit on the country's Supreme Court once he returns from Europe.
With Brazil's Supreme Court under intense scrutiny this year — accused by critics of overreach and politicization amid high-profile rulings, including the conviction of former President Jair Bolsonaro for plotting a coup — the President's next judicial appointment is landing at a politically charged moment.
Equities were also supported by strength in commodities and a recovery in oil prices.
Crude exporters in the region including Petrobras BMFBOVESPA:PETR3 and Argentina's YPF BCBA:YPDCB gained 3.5% and 0.8%, respectively. Miners such as Brazil's Vale BMFBOVESPA:VALE3 and Grupo Mexico BMV:GMEXICO/B gained 1.6% and 2.7%, respectively, while Chile's SQM BCS:SQM_A climbed 0.4%.
Mexican stocks BMV:ME and Brazil's Bovespa BMFBOVESPA:IBOV added 0.9% each.
Argentina's local stock index BCBA:IMV was flat while the peso FX_IDC:USDARS jumped 5.8%, ahead of the upcoming meeting between President Javier Milei and Trump at the White House, which some analysts believe will be crucial to underpinning market confidence.
In , the sol FX_IDC:USDPEN inched up 0.3% in light trading and the Lima Stock Exchange (.MXNUAMPESCPGPE) gained 2.4% as investors continued to digest the political turmoil following President Dina Boluarte's removal.
As the U.S. government shutdown stalls key economic data releases, investors are scanning the horizon for clues to guide near-term positioning. With only a handful of data points — including Argentina’s inflation later this week — global cues are stepping into the spotlight.
All eyes are on central bankers gathering at the International Monetary Fund meetings, while geopolitical developments are also shaping sentiment.
Key Latin American stock indexes and currencies:
Equities
Latest
Daily % change
MSCI Emerging Markets CBOE:EFS
1353.34
-0.9
MSCI LatAm (.MILA00000PUS)
2448.23
1.10
Brazil Bovespa BMFBOVESPA:IBOV
141976.97
0.92
Mexico IPC BMV:ME
61136.52
0.94
Argentina Merval BCBA:IMV
1953101.19
1.463
Chile IPSA BCS:SP_IPSA
8795.38
1.38
Colombia COLCAP BVC:ICAP
1869.78
-1.03
Currencies
Latest
Daily % change
Brazil real FX_IDC:USDBRL
5.4482
1.33
Mexico peso FX_IDC:USDMXN
18.4437
0.72
Chile peso FX_IDC:USDCLP
957.35
0.16
Colombia peso FX_IDC:USDCOP
3921.53
0.05
Peru sol FX_IDC:USDPEN
3.424
0.28
Argentina peso (interbank) FX_IDC:USDARS
1347
5.79
Argentina peso (parallel) (ARSB=)
1385
6.50