How US and Latin American Markets Are Reacting to Energy Prices

(Continued from Prior Part)

Latin American markets fall in line with commodity sectors

Depressed Latin American markets took cues from lower commodity prices as of 1:30 PM EST today. Investors were trading cautiously as expectations were bearish for commodity and crude-related indices ahead of the FOMC and BoJ monetary policy meetings. The Brazilian stock exchange BM&F Bovespa SA and the Mexican IPC index fell 1.6% and 0.42%, respectively.

The decline in global crude prices and other essential commodities caused the Colombian COLCAP index to trade with a lower bias of 1.0%. Colombia highly depends on crude prices, directly impacting its export revenues. Among the Latin American indexes, the Argentinian Merval Index fell 2.6% while the Chilean IPSA Select Index was trading 0.57% lower.

Mexican retail sales rise annually

Mexican retail sales rose 9.6% annually in February versus a 5.2% rise in the previous month. Retail sales in Mexico rose 0.2% monthly in February against a 2.7% increase last month. On the other hand, business confidence in Colombia fell to 4.1 in March compared to 10.4 in February.

Impact on the market

Among the Latin America–focused ETFs, the iShares MSCI Brazil Capped ETF (EWZ) fell 1.0% on April 25. The iShares MSCI Mexico Capped ETF (EWW) was trading 1.2% lower as of 1:30 PM EST.

Mexico, Colombia, Chile, and Brazil are closely linked to crude oil and commodity prices. The PowerShares DB Commodity Tracking ETF (DBC) fell 0.07% while the United States Oil ETF (USO) fell 2.1%.

On a broad-based level, the iShares Latin America 40 ETF (ILF) fell 1.3% while the iShares MSCI Emerging Markets ETF (EEM) fell 0.54%.

Browse this series on Market Realist:

• Part 1 - Energy SPDR Indices Fall ahead of this Week’s Fed and BoJ Meetings