EMERGING MARKETS — Latam stocks, FX slide as hot US inflation data lifts dollar, Treasury yields
MSCI FX, stocks index fall to over one-week low US inflation heats up in September; Fed rate hike this month back on table Argentina needs more structural reforms to taxation, IMF says Uganda hikes main interest rate to try to arrest currency's slide By Ragini Mathur and Sudeshna Ghoshal Oct 14 (Reuters) — Most Latin American stocks and currencies fell on Wednesday after a hotter-than-expected US inflation report hurt risk appetite and pushed up the dollar and Treasury yields. Consumer prices in the world's largest economy rose faster than expected last month, strengthening bets that the Federal Reserve will raise rates again as soon as this month. "September core inflation was hotter than expected and this has reinforced the view that the Federal Reserve has more work to do to contain price pressures," said James Knightley, chief international economist at ING. The dollar index gained 0.7%, and the benchmark 10-year Treasury yield climbed 6.6 basis points to 5.283%. A stronger dollar and higher US yields tend to hurt emerging markets as they make safer US assets more attractive and draw money out of riskier markets. MSCI's gauge of Latin American stocks slipped 1.6% and its region
MSCI FX, stocks index fall to over one-week low US inflation heats up in September; Fed rate hike this month back on table Argentina needs more structural reforms to taxation, IMF says Uganda hikes main interest rate to try to arrest currency's slide By Ragini Mathur and Sudeshna Ghoshal Oct 14 (Reuters) — Most Latin American stocks and currencies fell on Wednesday after a hotter-than-expected US inflation report hurt risk appetite and pushed up the dollar and Treasury yields. Consumer prices in the world's largest economy rose faster than expected last month, strengthening bets that the Federal Reserve will raise rates again as soon as this month.
"September core inflation was hotter than expected and this has reinforced the view that the Federal Reserve has more work to do to contain price pressures," said James Knightley, chief international economist at ING. 283%. A stronger dollar and higher US yields tend to hurt emerging markets as they make safer US assets more attractive and draw money out of riskier markets. 7%.
Both added to the previous session's losses and hit their lowest levels in more than a week during intraday trade. Brazil Leads Regional Losses Brazil led the region's losses for a second straight day. 3% lower. 1% in August from the previous month, adding to signs of a slowdown.
Together with renewed inflation pressure, the data makes the central bank's policy choices harder. Uncertainty ahead of this month's presidential runoff also kept investors on edge. 51 billion) in debt. "The administration continues announcing measures that could potentially damage the fiscal outlook in coming years," said Citi analysts in a note.
In Argentina, a senior International Monetary Fund official said the country needs to overhaul its tax system, including removing value-added tax exemptions, to move its fiscal consolidation forward. 7%, while its currency was little changed. 9% in September from August, though the annual rate eased a little. The IMF cut its growth forecasts earlier this week for Latin America and the Caribbean for this year and next.
It said most of the region was getting little lift from the AI boom that has helped other economies absorb the energy shock from the Middle East war. 0%. The move aims to stop a sharp slide in the shilling, which has hit repeated record lows as oil importers scramble for dollars. The currency rose more than 4% after the decision.
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