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Latin American Markets Rise, Chile Records Slower Inflation

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Latin American markets rose despite declining Chinese imports

Latin American markets were trading higher on August 8—taking cues from a rise in commodity and crude prices globally. Crude prices rose 3.0% on Monday at 2:30 PM EST due to speculations among investors that OPEC (Organization of the Petroleum Exporting Countries) might look to put a cap on oil production.

Among the Latin American indexes, the Brazilian BM&F Bovespa SA Index and the Mexican IPC Index rose by 0.12% and 0.26%, respectively, on August 8 at 2:30 PM EST. Higher demand for crude in the US drove the positive sentiment in the Colombian COLCAP Index—it rose by 0.13%. Colombia depends heavily on crude oil prices. Crude prices have a direct impact on its export revenues. The Argentina Merval Index was trading flat, while the Chilean IPSA Select Index rose by 0.29% on July 26 at 2:30 PM EST on Monday

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Chilean trade deficit continues, inflation eases

The Chilean trade deficit released at $90.1 million in May—compared to $33 million in the previous month and below expectations of a $200 million surplus. While a fall in exports by 9% on annual basis in July contributed to the gap due to lower crude sales, imports fell by 14% in July. On the other hand, inflation levels in Chile eased to 4% in July on an annual basis—slowing from 4.2% growth recorded last month. While prices of utilities and housing grew at a slower pace, the fall in the cost of transport also weighed on the sentiment.

Impact on the market

Among the Latin American ETFs, the iShares MSCI Brazil Capped ETF (EWZ) fell by 0.15% on August 8 at 2:30 PM EST. The iShares MSCI Mexico Capped ETF (EWW) rose by 1.4%.

Mexico, Colombia, Chile, and Brazil are closely linked to crude oil and commodity prices. The PowerShares DB Commodity Tracking ETF (DBC) rose by 0.63% on August 8 at 2:30 PM EST. The iShares Latin America 40 ETF (ILF) rose by 0.39%. The iShares MSCI Chile Capped (ECH) rose by 0.89%.

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