Latin American Markets Trade Positively: How Did It Impact ETFs?



Latin American markets

Critical Latin American indexes were trading on a positive note on February 29, 2016. The Brazilian index, the BM&F BOVESPA, rose by 3.1% as Brazilian markets got a boost from the People’s Bank of China cutting the reserve ratio requirement for banks. Argentina’s Merval index saw a rise of 2.9% at 12:00 PM EST.

The Mexican index, the IPC, was trading almost flat, with a slight rise of 0.27%, while Chile’s IPSA index rose by 0.46%. The Colombian index, COLCAP, could not keep up with the other Latin American countries’ indexes, but rose slightly by 0.2% despite the unemployment rate rising to 11.9%.

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Chilean data released hits a mixed note

Chile had a flurry of data released on February 29, 2016. The unemployment rate saw a slight fall towards 5.8%, and industrial production was disappointing, falling by 8.3% on a year-over-year basis. Year-over-year retail sales rose to 3.7% on an annual basis, while the production of copper, Chile’s major export, had a heavy fall of 13.8%.

Outside Latin America, the Canadian current account came in according to forecasts, at $15.4 billion, and the producer price index rose by 1.7% on an annual basis.

Impact on the market

The iShares MSCI Brazil Capped ETF (EWZ) rose by a significant 3.6% on February 29, 2016, at 12:30 PM EST. The iShares MSCI Mexico Capped ETF (EWW) rose by 1.5%.

Among the broad-based funds, the iShares Latin America 40 ETF (ILF) and the iShares MSCI Emerging Markets ETF (EEM) rose by 2.2% and 1.6%, respectively.

Latin American countries such as Mexico, Chile, and Brazil are closely linked to commodity prices. The PowerShares DB Commodity Tracking ETF (DBC) rose by 1.1%.



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