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EMERGING MARKETS-Latam currencies, stocks wobble after Trump reiterates March 4 tariff deadline

ReutersFeb 27, 2025 9:18 PM
  • Venezuelan bonds lose ground
  • Kurdish militant leader calls for end to conflict with Turkey
  • Petrobras shares drop after results
  • MSCI Latam FX down 0.6%, stocks off 1%

Updates with mid-session trading

By Lisa Pauline Mattackal and Purvi Agarwal

- Emerging markets broadly fell on Thursday after President Donald Trump said proposed tariffs on Mexico and Canada were set to be implemented next week as previously scheduled, renewing some nervousness among investors.

China will be charged an additional 10% on that day, Trump said in a Truth Social post.

Mexico's peso MXN= fell 0.3%, while the loonie CAD=D3 weakened 0.7%. The offshore Chinese yuan CNH= lost 0.5%.

MSCI's index of Latin American currencies .MILA00000CUS fell 0.6%, on track for its fourth consecutive session of declines. A gauge of regional stocks .MILA00000PUS dipped 1%, heading for its fifth session of losses.

Trump's announcement followed his comments late Wednesday that implementation of tariffs on Mexico and Canada could be delayed until April 2, though a White House official later said the March 4 deadline remains in effect.

The back-and-forth comments added to the lack of clarity around Trump's threats, with many investors increasingly looking at them as a negotiation tactic after Trump had earlier provided a month-long reprieve. Most Latam currencies remain positive versus the dollar so far this year.

"Although this could be read as a negotiation tactic from Trump, I think he's actually going to implement at least some of these tariffs as a way of sending a message that his threats are real," said Antonio Di Giacomo, financial markets analyst for Latin America at trading platform XS.

"At the same time, there is a chance that these are not going to be sustained in the long term."

Indexes tracking global EM stocks .MSCIEF and currencies .MIEM00000CUS extended losses to fall 1.2% and 0.5%, respectively.

Trump also said late Wednesday he was reversing a license given to Chevron CVX.N to operate in Venezuela, accusing President Nicolas Maduro of not making progress on electoral reforms and migrant returns.

Venezuela's dollar bonds and those from state-owned energy company PDVSA dropped, with most down over 2 cents.

Analysts expect the move to stoke inflation in the country and depreciate the local bolivar currency.

Brazil's real BRL= dipped 0.4%. The country's vice president will have a call with U.S. Commerce Secretary Howard Lutnick on Friday to discuss tariffs, according to a report.

Brazil's jobless rate rose to 6.5% in the quarter through January. The country posted a primary budget surplus in January that was slightly below market expectations.

Meanwhile, Brazil's state-run oil firm Petrobras PETR4.SA fell about 4% after the company reported a surge in capital expenditures.

Regional stock indexes were broadly lower, with ones in Argentina .MERV down 3.5%, Colombia .COLCAP shedding 1.5% and Mexico .MXX off 1%.

Elsewhere, Turkey's main stock index jumped 1.8% .XU100, though the lira TRYTOM=D3 was little changed after jailed militant leader Abdullah Ocalan called on his Kurdistan Workers Party (PKK) to lay down its arms, a move that could have far-reaching political and security consequences for the region.

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Key Latin American stock indexes and currencies at 2012 GMT:

Equities

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1122.48

-1.14

MSCI LatAm .MILA00000PUS

2019.13

-0.95

Brazil Bovespa .BVSP

125293.02

0.42

Mexico IPC .MXX

52765.99

-1

Chile IPSA .SPIPSA

7392.85

0.57

Argentina Merval .MERV

2196333.84

-3.46

Colombia COLCAP .COLCAP

1621.34

-1.51

Currencies

Latest

Daily % change

Brazil real BRL=

5.8265

-0.4

Mexico peso MXN=

20.475

-0.31

Chile peso CLP=

950.65

-1.01

Colombia peso COP=

4127.5

-0.61

Peru sol PEN=

3.674

-0.36

Argentina peso (interbank) ARS=RASL

1061.75

-0.05

Argentina peso (parallel) ARSB=

1205

2.07

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