Latin American currencies, stocks rebound; Argentine bonds slide

Updated at 1513 GMT

By Johann M Cherian

July 16 (Reuters) –Most Latin American currencies and equities bounced from losses on Tuesday, as investors mulled former U.S. President Donald Trump’s possible return to power next year, while Argentine foreign currency bonds slid as concerns piqued about dollar reserves.

MSCI’s Latin American stocks index .MILA00000PUS climbed 0.6%, after more than a 0.3% loss in the previous session, while a regional currencies gauge .MILA00000CUS climbed 0.6% against the dollar, after three straight days of declines.

Most currencies in the region fell on Monday as investors anticipated a second term in the White House for Trump, who survived an assassination attempt over the weekend. The Republican presidential candidate selected U.S. Senator J.D. Vance to be his vice presidential running mate. Vance shares Trump’s hardline populist views.

Trump’s policies on trade, migration and security are seen as unfavorable to developing economies.

“The vice president nominee for Trump probably sends the signal that they’re all about ‘Making America Great Again’ and that powered some sell-off yesterday, but then people are thinking, maybe it’s not too obvious and you don’t know what he’s going to do anyway,” said Eduardo Ordonez Bueso, an emerging markets debt portfolio manager at BankInvest.

Also supporting some bids were expectations of imminent U.S. interest rate cuts following Federal Reserve Chair Jerome Powell’s comments that the trajectory of U.S. inflation was heading to the U.S. central bank’s2% target. USD/

Brazil’s real appreciated 0.5%, while Mexico’s peso MXN= edged 0.4% higher, after notching its biggest single-day drop in nearly three weeks on Monday.

Peru’s sol PEN= inched up 0.3%, while Colombia’s peso COP= dipped 0.8% and was on track for its biggest daily drop in three weeks as crude prices slid more than 1%. O/R

Brazil’s Bovespa stocks index .BVSP slipped 0.1%, weighed down by Vale’s VALE3.SA more than 2% drop.

Among individual stock movers, Eneva ENEV3.SA rose 1.7% after the energy company said it will issue shares that could total up to $770.9 million while also announcing its acquisition of some thermal power assets from lender BTG Pactual BPAC3.SA.

Mexican stocks .MXX jumped 0.4%, recovering from their biggest daily drop in more than a week on Monday.

Yields on Argentine dollar-denominated bonds 040114HX1=1M, 040114HV5=1M, 040114HT0=1M gained between 71 and 135 basis points on concerns over reserves accumulation.

Late last week, Argentina’sgovernment said the country’scentral bank will start selling U.S. dollars in the parallel foreign exchange markets to combat inflation and freeze the country’s money supply.

Elsewhere, the International Monetary Fund raised its economic growth projections for the global economy in 2025 by one-tenth of a percentage point to 3.3%, and bumped up its forecast for China to 4.5% from an earlier estimate of 4.1%.

The IMF also raised India’s growth forecast for 2024-2025 to 7% from 6.8% on the back of improving private consumption, particularly in rural parts of the South Asian nation.

Key Latin American stock indexes and currencies:

Reporting by Johann M Cherian in Bengaluru; Editing by Paul Simao