Yahoo Finance Rise in Commodity Prices Support Latin American Markets
Global Markets Ride on Crude Rally, Macro Data
Latin American markets trade higher on commodity rise
Latin American markets were trading higher on Wednesday, May 25, 2016, supported by a rally in crude and other commodity prices. Brazilian stocks rallied as its acting president, Michel Temer, won his first victory with the country’s congress by receiving support on showing a budget deficit prior to making interest payments.
Investors were optimistic about the measures, which can potentially shore up the country’s finances.
Among the Latin American indexes, the Brazilian BM&F Bovespa SA and the Mexican IPC index rose by 0.97% and 0.48%, respectively. The Argentinian Merval Index fell by 0.74% while the Chilean IPSA Select Index was trading higher by 0.17%.
The rise in global crude oil prices and other essential commodities was unable to support the sentiment in the Colombian COLCAP Index, which traded 0.76% lower. Colombia depends heavily on crude oil prices, which directly impact its export revenues.
Mexican trade balance falls
The Mexican trade deficit grew by $2.1 billion in April in comparison to a surplus of $155 million in March. The fall in the trade balance was driven by exports that fell at a faster pace against the country’s imports.
From January–April 2016, exports have fallen by 6.4% while imports have dropped by 3.2%.
Market impact
Among the Latin America–focused ETFs, the iShares MSCI Brazil Capped ETF (EWZ) fell by 0.61% on May 25, 2016, while the iShares MSCI Mexico Capped ETF (EWW) was trading 0.66% higher as of 2:00 PM ET.
Mexico, Colombia, Chile, and Brazil are closely linked to crude oil and commodity prices. The PowerShares DB Commodity Tracking ETF (DBC) rose by 0.94%.
On a broad-based level, the iShares Latin America 40 ETF (ILF) increased by 0.37%. The iShares MSCI Emerging Markets ETF (EEM) rose by 1.2%.
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