Latin America receipts posted modest declines, as strength in U.S. markets was unable to spur more interest in emerging markets. A smaller-than-expected U.S. trade deficit and tumbling oil prices helped boost U.S. stocks.
Meanwhile, indications of higher inflation in Brazil dampened market sentiment. Mexican issues also moved lower, while Argentine shares rebounded following a recent string of losses. Brazil’s benchmark Bovespa Index ebbed 64.05 points, or 0.26%, while Mexico’s benchmark Bolsa Index slipped 32.59 points, or 0.26%. Argentina’s Merval Index recovered 19.12 points, or 1.38%.
The U.S. trade deficit narrowed to US$54.99 billion in March from a revised US$60.57 billion deficit in February. Analysts were looking for a much wider deficit of US$61.50 billion. During the month, imports fell despite a big jump in oil prices and exports rose to a record level. The deficit with China also narrowed.
Brazilian issues again slid lower, amid a higher-than-expected domestic inflation figure that could signal further rate tightening in the country. Brazil’s IPCA Broad Consumer Price Index advanced 0.87% in April, up from 0.61% in March, according to statistics institute IBGE. The news boosted the 12-month IPCA rate for the year ended in April to 8.07% from 7.54% at March’s end. The IBGE cited administered prices in urban transportation and food as part of the reason for April’s higher reading. The next central bank meeting for reviewing interest rate levels is set for May 17 and 18.