Consumer prices remained unchanged in October in the United States, amid a decline in gasoline prices, while core inflation showed signs of slowing. The data led traders on Tuesday to eliminate bets that the Federal Reserve would raise borrowing costs further and bet on rate cuts as early as May.
“We are happy to see that both the headline and core CPI are lower than expected. It tells us that the Fed is done, that there is nothing left for them to do here,” said Thomas Hayes, president of hedge fund Great Hill Capital in New York.
“You have to be aware of the potential for deflation, but right now this is ‘Goldilocks’. This is what the Fed was looking for: slow inflation, slow the labor market and maintain the economy at the same time,” he added .
In this context, in international markets, The dollar fell, as did Treasury yields, while Wall Street rose sharply.
The Brazilian real advanced 0.91% to 4.8631 units per dollar, while the main index of the B3 stock market in Sao Paulo, the Bovespa, rose 2.32% shortly before closing to 123,202.13 points, hand in hand with investors’ appetite for risk.
He Mexican peso was trading at 17.3596 units per dollar, with a rebound of 1.34% against Monday’s Reuters reference price, heading towards levels last seen in September. For its part, in the stock market, the benchmark S&P/BMV IPC exceeded the psychological level of 52,000 points by climbing 2.54%, to 52,387.95 units.
The Chilean peso soared 3.47%, to 891.20/891.50 units per dollar, a one-week high and its biggest daily rise since July of last year. The local currency was also boosted by the advance in the value of copper, the country’s main export, which rose on Tuesday to its highest level since November 6. However, the main index of the Santiago stock market, the IPSA, distanced itself from the other markets and fell 0.26% to 5,712.10 points, after a strong rise the day before.
The Colombian peso strengthened 1.6% to 3,965.88 units per dollar, after being inactive for a local holiday on Monday. In the Colombian stock market, the MSCI COLCAP stock index added 0.5% to 1,108.49 points.
The Peruvian currency, the sol, appreciated a significant 1.18% to 3.766/3.711 units per dollar. Meanwhile, the benchmark of the Lima Stock Exchange advanced 0.96% near the close to 569.06 points.
Source: Ambito
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