Latam FX muted after recent gains; Argentine markets hit after crypto scandal

* MSCI Latam currencies index up 0.1%, stocks up 0.3% * Rouble slips, Ukraine bonds fall ahead of U.S.-Russia talks * Argentina’s stocks drop after crypto scandal * Brazil economic activity slipped in December (Updates to mid-session trading) By Lisa Pauline Mattackal and Johann M Cherian Feb 17 (Reuters) – Most Latin American currencies were muted on Monday, as investors paused after ending the previous week on a buoyant note, while Argentine stocks and bonds slid after libertarian President Javier Milei was linked to a cryptocurrency scandal that is now under investigation. Argentina’s benchmark index slid 5.4% and hard-currency bonds fell between 0.2 and 2.6 cents on the dollar after lawmakers said President Milei could face an impeachment trial after touting the $LIBRA cryptocurrency which crashed soon after. “There have been calls for the impeachment of Argentinian President Milei after their social media account endorsed a crypto, the price of which went first to ($)5,000, then to less than ($)1,” said Paul Donovan, chief economist at UBS Global Wealth Management. “Bursting bubbles, whether crypto, NFTs, or tulips have similar economic effects. Wealth is transferred from bubble buyers to bubble sellers, and tends to depress consumption.” More broadly, MSCI’s index tracking the region’s currencies was up 0.1%, hovering around its highest level since October, while the index tracking regional stocks gained 0.3% to its highest in three months Most regional currencies and stock indexes notched weekly gains on Friday, after a bigger-than-expected drop in U.S. retail sales rekindled hopes for multiple Federal Reserve rate cuts this year. The delayed implementation of reciprocal U.S. tariffs also brought some relief despite continued uncertainty over how and when Trump’s administration will proceed. On Monday, local currency bonds gained between 1 and 6.4 reals and local stocks added 0.6% after economic activity data showed that the economy grew 3.8% in 2024, but lost some momentum at the end of the year after the central bank began to hike interest rates. Brazil’s real was last flat after the central bank’s monetary policy director reiterated expectations for an interest rate hike of 100 basis points at the next policy meeting. On the other hand, Chile’s peso dipped 0.8%, snapping a nine-session winning streak as copper prices fell. The trade-sensitive Mexican peso was flat, while the main stock index added 0.3%. Colombia’s peso dipped 0.1% as investors assessed data that showed the economy grew by 1.7% in 2024, less than the 1.8% as per a Reuters forecast. The Colcap index rose 1.2%, boosted by oil company Ecopetrol’s 1.2% jump, tracking higher crude prices. Peru’s sol inched up 0.2% after data on Saturday showed the economy grew more than expected in December. Trading was light, with U.S. markets closed for a holiday. RUSSIA PEACE TALKS Meanwhile, focus remained on geopolitics, as investors awaited the outcome of discussions to resolve the Russia-Ukraine conflict. The rouble’ s recent rally stalled ahead of the discussions, with the currency losing 0.4% against the dollar. Prices of Ukraine’s sovereign dollar-denominated bonds dropped, with the 2036 maturity losing 1 cent to trade at 68.75 cents on the dollar, its biggest daily fall this year. Still, hopes for an end to the three-year conflict lifted stocks in Europe, despite uncertainty as the region’s leaders met for an emergency summit and Ukraine President Volodymyr Zelenskiy dismissed the talks. Polish stocks jumped to their highest since 2018, and the PX Prague SE Index hit a fresh record high. Key Latin American stock indexes and currencies at 1952 GMT: Latin American market prices from Reuters Eq Latest Daily % change ui ti es MS 1130.6 0.48 CI Em er gi ng Ma rk et s <. MS CI EF > MS 2128.32 0.39 CI La tA m <. MI LA 00 00 0P US > Br 129052.15 0.65 az il Bo ve sp a <. BV SP > Me 54253.92 0.33 xi co IP C <. MX X> Ch 7303.62 -0.76 il e IP SA <. SP IP SA > Ar 2256465.65 -5.484 ge nt in a Me rv al <. ME RV > Co 1571.29 1.24 lo mb ia CO LC AP <. CO LC AP > Cu Latest Daily % change rr en ci es Br 5.7095 -0.09 az il re al Me 20.2768 0.07 xi co pe so

Ch 947 -0.83 il e pe so

Co 4128.24 -0.11 lo mb ia pe so

Pe 3.692 0.19 ru so l