The looming announcement from the Fed hit the US stock market and LatAm. affected

A possible rate hike affected the behavior of Latin American markets, which ended the week with losses.

The biggest setback came in Brazil, where Ibovespa fell by more than 2%, buoyed by the performance of the energy, industrial and information technology sectors.

Shares of Locaweb, Azul and Gol were among the biggest losers of the day. Petrobras shares also closed lower.

The Mexican stock market closed three days in a row with losses. Non-basic consumer goods, industrials and materials sectors hit red from S&P/BMV IPC

and Wall Street

Those responsible for US monetary policy again insisted that they do everything in their power to reduce inflation, in a “threatening” tone. Investors reacted Thursday to comments from St. Louis Fed Chair James Bullard and Kansas City Fed Chair Esther George, who remained adamant about the need to raise interest rates further.

He told the Wall Street Journal that Bullard was proposing another major hike in the benchmark interest rate, which would “put significant pressure on inflation.”

George, for his part, said that “the argument for continuing to raise rates remains strong”, although he stressed that he should be aware that policy decisions are “often delayed”.

Those comments included Thomas Barkin, chairman of the Richmond Federal Reserve Bank, who insisted on Friday that he was “committed” to bring inflation back to the 2% target. “We will do everything we can to get there.”

With this position, the S&P 500 fell 1.29%, while the Dow Jones Industrial fell 0.86%. The Nasdaq Composite fell 2.01%.

This volatility was also related to the expiration of $2 trillion in options, forcing investors to roll over existing positions or start new ones.

The looming announcement from the Fed hit the US stock market and LatAm.  affected

what happened during the day?

Despite a modest recovery in oil prices, they posted losses of 1.5% per week as rumors of an economic slowdown weigh on investor sentiment.

Expectations of lower market growth outweighed US signals that demand remained strong.

Another issue that affected performance was progress in negotiations for a nuclear deal with Iran. “This remains a potential downside to prices, given the possibility that too much crude oil will hit the market soon,” said Craig Erlam, an analyst at Oanda.

Cryptocurrencies were also affected, with bitcoin posting a 9.2% drop during the day, the largest since June 18.

How markets behave in Latin America

Argentina:

The Argentine Ambassador to the United States, Jorge Argüello, was one of the heroes of the conference organized by the American Society and Council of the Americas, together with the Argentine Chamber of Commerce and whose keynote speaker was the Minister of Economy, Sergio Massa, used to be.

Bolivia:

In May, President Luis Arce promoted employee day pay increases of 3% in base wage and 4% in minimum wage. While the measure was positive, currently only 10% of the population in the country has formal employment making the measure effective.

Brazil

He said Citi’s head of capital markets in Brazil, Marcelo Milan, said investors should expect a definition of how the electoral government’s economic team will deal with the prospect of a “very challenging first year” after the election.

Chili

Chilean authorities are preparing legal proceedings against mining company Ojos del Salado, which is 80% owned by Lundin Mining and 20% by Sumitomo, for a 35-meter-diameter sinkhole that opened in Tierra in early August. Appeared in the Alcaperosa mine in Amarilla. Atacama area.

Colombia

Treasury Secretary Jose Antonio Ocampo sent an urgent message to Congress to process the tax reform tabled in the early days of the Gustav Petro administration. Requesting an urgency cuts the process in Congress until the following September 15, when the motion must be approved.

Ecuador

In the first half of 2022, the private sector increased its participation in the stock exchange with a view to obtaining financing. According to data from the Guayaquil Stock Exchange, paper trading is up 15.3% from the same period last year. The stock market closed at US$7,011 million, which is 6.4% of the national GDP.

Guatemala

On August 8, the route was released at 15.5 km, Vila Nueva, which had been blocked for almost two months due to a collector collapse and geological fault.

Honduras

The National Congress approved by 44 votes the loan agreement signed by the Ministry of Finance to the Central Bank of Honduras and the Government of the Republic for an amount of $1,000 million.

Mexico

Vice Governor Jonathan Heath said Mexico’s central bank is likely to follow in the footsteps of the US Federal Reserve Banksicos, matching the Fed’s previous two previous 75 basis point hikes and raising interest rates to up to 8 last week. 5%. Is. Mexico’s central bank has traditionally followed Fed rate hikes to prevent large amounts of capital from leaving the country and weakening the peso.

Peru

The head of the Peruvian Ministry of Economy and Finance, Kurt Berno, this Friday rejected that the government is studying a new phase of a loan scheme for reactive Peruvian companies, with Minister Roberto Sánchez saying President Castillo is considering the possibility. Goods.

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