Iran's foreign minister visits Islamabad, fueling speculation on renewed peace talks
Peru faces electoral uncertainty as probe targets ex-chief electoral official
Brazil's central bank expected to cut rates next week
LatAm assets broadly headed for weekly losses
April 24 (Reuters) - Currencies and stocks of Latin American economies dipped on Friday with investors awaiting updates on Middle East talks, while also monitoring electoral developments in Peru
Global markets have been fraught with volatility this week as initial hope that a peace deal could be reached between Iran and the U.S. did not materialize, even as the ceasefire between all adversaries was extended.
Iranian Foreign Minister Abbas Araqchi arrived in Islamabad on Friday, the venue for past peace talks with the United States, although there were no clear signs that he would meet with U.S. negotiators there.
Crude prices, a key driver for markets, wavered and were last at $105 a barrel as shipments through the strategic Strait of Hormuz remained thin.
In Latin America, Brazil's real led gains with a 0.4% rise, while Chile's peso firmed 0.2% and the pesos of Colombia and Mexico were steady.
MSCI's broader LatAm currencies index (.MILA00000CUS), opens new tab was on track for weekly declines - its first since the first week of March - as investors flocked to the safe-haven dollar.
A corresponding gauge for equities (.MILA00000PUS), opens new tab was down 0.6% at over two-week lows and set for weekly losses
Peru's former chief electoral official, who resigned this week amid mounting criticism over delays in counting votes from the April 12 general election, is now under investigation as part of a broader probe into alleged electoral irregularities, with police raiding his home to collect evidence.
The sol weakened 0.5% and was on track for its second straight week in the red, as investors weighed what the investigation could mean for the election results now expected in May.
Conservative candidate Keiko Fujimori currently leads, with left‑wing lawmaker Roberto Sanchez and former Lima mayor Rafael Lopez Aliaga in a tight race for second place. A run-off is anticipated in June.
MSCI's index tracking Peruvian equities (.MIPE00000PUS), opens new tab was little changed on Friday and was set for its second straight week of losses, while international bonds maturing next year were on track for their third straight week of declines.
We expect the U.S. to continue strengthening its ties in Latin America to bolster its geopolitical influence," said Gillian Edgeworth, fixed-income portfolio manager at Wellington Management, while also adding that some countries in the region could benefit from higher commodity prices due to the Middle East conflict.
Meanwhile, data showed that Mexico's economic activity expanded slightly in February but missed expectations, extending its rough patch since the start of the year.
Uncertainty prevails over the central bank's next policy move alongside the outcome of United States-Mexico-Canada Agreement negotiations expected to start next month.
There is progress in the review, but the process is unlikely to be smooth. Recent headlines suggest Mexico will continue facing unilateral tariffs in the auto, steel, and aluminum industries despite reaching a deal," Citigroup economists said in a note
The country's equities index (.MXX), opens new tab gained 0.9% on Friday, while benchmarks in Chile (.SPIPSA), opens new tab and Argentina (.MERV), opens new tab were up 1.6% and 0.3%, respectively
Meanwhile, Brazil's finance minister told Reuters that the country's planned critical mineral rules do not involve fresh tax breaks. He added that critical minerals would be a priority in a May or June auction for the Eco Invest program, which offers blended finance to lure foreign investment.
A key event next week will be an interest rate decision in Brazil, with economists projecting a cut by a quarter of a percentage point. The Bovespa index (.BVSP), opens new tab slipped 0.5% and is on track for weekly losses
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