LatAm Brief: Chile's govt raise their inflation forecasts

02 OCT 11:38GMT: The dollar caught a bid, rising to a session high of 101.337 following escalating tensions in the Middle East. Iran subsequently announced the action was concluded unless there was further Israeli retaliation, whilst Israel has vowed to retaliate. This also overshadowed the US JOLTs data, which showed that the JOLTS job openings rose significantly larger than expected in August, pointing to a modest increase in demand for labour, remaining consistent with most recent labour market data. Attention now shifts to the US ADP Employment data (12:15GMT). UST yields have been widening across the board and USD/LatAms may be firmer at the LatAm open on Wednesday. USD/MXN is softer, falling to a 5-day low of 19.5354 after Sheimbaum was sworn in as Mexico's first female Pres, pledging to continue her mentor's efforts to improve the lives of Mexico's poorest, while also safeguarding foreign investment (via Bbg). Studies show only below 19.236 (24 Sep low) would delay and re-open 19.067/19.022 (former is 18 Sep low). USD/CLP may be firmer even after Chile's govt cut their 2025 avg CPI f/c to 4.2% (from 4.4% prior), raised their 2024 CPI f/c to 3.9% (from 3.7% prior), while keeping their 2024 GDP f/c steady at 2.6%. Elsewhere, Itau economist voiced that the Chilean govt is is likely to miss their deficit target for 2024 (via Bbg). USD/BRL may also be firmer, however may face pressure from BRL bulls as Moody's raised Brazil's credit rating to Ba1, one level below investment grade, from Ba2, with a positive outlook. FinMin Haddad voiced that the country could reach IG grade status if they remain fiscally responsible. Elsewhere, BCB's Neto voiced that structural growth is higher and the labour market is stronger (via Bbg). Still to come in LatAm is Brazil's Industrial Production (12GMT), Mexico's Gross Fixed Investment (12GMT), Manuf PMI, Remittances, Banxico survey (15GMT).

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