EMERGING MARKETS-LatAm FX, shares mixed as investors weigh Brazil, Argentina inflation print

By Pranav Kashyap and Ragini Mathur

Feb 10 (Reuters) - Latin American currencies and stocks were mixed on Tuesday as investors digested inflation data from Brazil and Argentina, while falling metal prices added pressure to the region's resource-dependent markets.

A benchmark index for Latin American equities .MILA00000PUS pulled back from a more than one-week peak, slipping 0.6%, while a similar currency index .MILA00000CUS fell 0.3% as it came off the record high it hit in the previous session.

In Brazil, the real BRL= and the stock index .BVSP were nearly flat after inflation came in broadly as expected and stayed within the government's target band.

The currency has enjoyed a long stretch of "carry" appeal, buoyed by a lofty 15% policy rate through much of last year. But that advantage could be tested as the central bank has signaled it may begin cutting rates in March based on cues from data.

The country's finance minister has also said he sees no reason for the real interest rate to continue rising.

Argentina's monthly inflation rate was 2.9% in January, a tick up from the 2.8% registered in December and above analysts' forecast of 2.5%.

The data comes amid accusations that President Javier Milei's administration is obscuring true inflation by delaying methodology updates to the CPI basket.

Stocks in Buenos Aires .MERV gained 2%, while the local peso ARS=RASL was up 0.9%, to hit a near three-month high.

"Investors are going to start to be very picky and start looking to fundamentals in specific countries in the region," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

"The market had a stellar 2025, but 2026 will be more selective; the performance is going to rotate rather than repeat."

STRONG START TO THE YEAR FOR EM

Despite Tuesday's muted performance, Latin American equities have opened 2026 on strong footing.

Bogota's benchmark index .COLCAP is up nearly 17% year-to-date, Brazil has gained 15.4% and Mexico .MXX is up about 11%. By comparison, the S&P 500 .SPX has risen just 1.6%, while the dollar =USD has fallen 1.5%.

Meanwhile, Goldman Sachs raised its 12-month MSCI EM target to 1,680, driven by upgraded 2026 earnings growth expectations of 25%, up from 19%, implying double-digit return potential.

On the day, Chile's peso CLP= slipped 0.7% from its highest level since September 2023, while stocks .SPIPSA dropped 2.1%, lowest in nearly a month, as copper prices fell.

Colombia's currency COP= was little changed, while stocks rose 0.7%. A Reuters poll showed Colombia's economy likely posted strong growth in the fourth quarter of 2025.

Elsewhere, Kenya's shilling KES= was flat as markets digested the central bank's move to cut the benchmark lending rate to 8.75% - its 10th straight rate cut to encourage lending in the private sector.

Key Latin American stock indexes and currencies: