<div id="readability-page-1"><div><div><div>Key points:<ul><li>Stocks up 0.9%, currencies flat</li><li>Investors eye Honduras elections, US-Venezuela tensions</li><li>Brazil's Bovespa tops 164,000 points</li></ul></div>By Niket Nishant Latin American stocks extended gains on Thursday, driven by growing expectations that the U.S. Federal Reserve will begin lowering interest rates soon, while investors also focused on key regional developments. MSCI's index of LatAm equities (.MILA00000PUS) climbed 0.9% to hit a near six-year high, on pace to extend its winning streak to a third day. A parallel index for regional currencies (.MILA00000CUS) gave up early gains to trade slightly lower on the day, following an eight-day winning streak driven by elevated bets on a quarter-point U.S. rate cut next month.Lower U.S. rates typically weaken the dollar and spur demand for higher-yielding assets, including many Latin American currencies.Although December is usually a subdued period for markets, investors have been juggling several factors, including shifting rate-cut expectations, persistent geopolitical tensions in Ukraine despite diplomatic efforts, and a series of local political and economic developments.In Latin America, attention is focused on an increasingly contentious presidential race in Honduras between conservative candidate Nasry Asfura, backed by U.S. President Donald Trump, and centrist rival Salvador Nasralla. Nasralla has alleged fraud in the presidential vote after Asfura pulled narrowly past him overnight. Honduran dollar-denominated bonds were little changed on Thursday.BRAZILIAN EQUITIES HIT RECORD HIGHBrazil's Bovespa rose 1.4% and surpassed 164,000 points for the first time after data showed that the economy slowed more than expected in the third quarter, boosting expectations of rate cuts early next year. The real was steady against the dollar. &#34;We expect the economy to slow further in 2026 and with inflation set to continue falling. We think Copom (Monetary Policy Committee of Brazil's central bank) will shift to interest rate cuts at its meeting in January,&#34; analysts at Capital Economics said in a note. Brazil's trade surplus fell 13.4% in November from the same month last year, official data showed, landing almost in line with economists' estimates. Meanwhile, Brazilian Congressman Gervasio Maia, sponsor of the 2026 budget guidelines bill, proposed excluding up to 10 billion reais ($1.9 billion) from next year's fiscal target for state-owned companies. Chile's main stock index was flat, while the local peso rose 0.1%. Chilean mining giant SQM slipped 2.6% after raising approximately $430 million in a bond sale. Mexican equities and the peso were up 0.1% and 0.3%, respectively. Trump could decide next year to withdraw from the United States-Mexico-Canada trade agreement, Politico reported, citing U.S. Trade Representative Jamieson Greer.In Argentina, equities slipped 0.3%. The peso rose 0.86%, while most dollar bonds were slightly higher.Argentine officials are starting to prepare the country's return to international bond markets by the start of 2026, Bloomberg News reported on Wednesday, citing people familiar with the matter.The International Monetary Fund said the country must adjust its monetary and exchange-rate policies to build reserves and regain access to international capital markets. Colombian stocks steadied and the peso was up 0.1% against the greenback.Additionally, investors are monitoring developments in Venezuela amid aggressive rhetoric between Trump and Venezuelan President Nicolas Maduro.U.S. pressure on Venezuela has been building, including strikes against alleged drug-smuggling boats and threats of military action.Key Latin American stock indexes and currencies:<div><table><tbody><tr><td>Stock indexes</td><td> Latest </td><td> Daily % change </td></tr><tr><td>MSCI Emerging Markets CBOE:EFS</td><td>1376.13</td><td>0.23</td></tr><tr><td>MSCI LatAm (.MILA00000PUS)</td><td>2788.85</td><td>0.9</td></tr><tr><td>Brazil Bovespa </td><td>164062.18</td><td>1.43</td></tr><tr><td>Mexico IPC </td><td>63670.79</td><td>0.12</td></tr><tr><td>Chile IPSA </td><td>10179.37</td><td>0.03</td></tr><tr><td>Argentina MerVal </td><td>3118995.85</td><td>-0.33</td></tr><tr><td>Colombia COLCAP </td><td>2107.44</td><td>0.08</td></tr><tr><td>Currencies</td><td>Latest</td><td>Daily % change</td></tr><tr><td>Brazil real </td><td>5.3068</td><td>0.02</td></tr><tr><td>Mexico peso </td><td>18.231</td><td>0.27</td></tr><tr><td>Chile peso </td><td>917.3</td><td>0.12</td></tr><tr><td>Colombia peso </td><td>3794</td><td>-0.84</td></tr><tr><td>Peru sol </td><td>3.3596</td><td>0.01</td></tr><tr><td>Argentina peso (interbank) </td><td>1,441.0</td><td>0.86</td></tr><tr><td>Argentina peso (parallel) (ARSB=)</td><td>1,410.0</td><td>2.08</td></tr></tbody></table></div></div></div></div>

Latin American stocks rose 0.9% amid optimism over potential U.S. Federal Reserve rate cuts, while regional currencies remained flat. Brazil's Bovespa hit a record high, driven by economic slowdown expectations. Investors are watching Honduras' presidential race and U.S.-Venezuela tensions. Chile's SQM fell after a bond sale, while Mexican equities and the peso rose slightly. Argentina's peso increased, with officials preparing for bond market re-entry by 2026. Key stock indexes and currencies showed mixed performance across the region.

LatAm stocks extend climb on Fed optimism; regional developments in focus