By Bruno Federowski SAO PAULO, May 26 Brazilian stocks and currencies rose on Friday as traders hoped for progress on an ambitious reform agenda despite a growing political crisis ensnaring President Michel Temer. The Brazilian real strengthened 0.7 percent but remained far from the two-month peaks seen before the political scandal over bribery allegations broke out last week. Brazil's benchmark Bovespa stock index rose 1.1 percent. Shares of state-controlled power utility Centrais Elétricas Brasileiras SA, which ranked among the top decliners in the recent selloff, were the biggest gainers. Efforts by Temer's administration to foster trust in plans to streamline Brazil's pension system and reform labor laws have seemed to bear fruit among investors. House Speaker Rodrigo Maia has said he expects the lower house to vote on pension reform by mid-June, clearing the way for a final Senate vote. That cautious optimism has rekindled bets that the central bank would cut interest rates by a brisk 100 basis points next week despite market volatility drive by political turmoil, driving yields on rate futures lower. Also contributing to the drop were expectations of rapidly slowing inflation after state-controlled oil company Petróleo Brasileiro SA announced a cut on fuel late on Thursday. Earlier on Thursday, emerging stocks inched to two-year highs, supported by relatively dovish minutes from the last U.S. Federal Reserve meeting. Still, disappointment over the scale of oil supply cuts announced by OPEC have kept the MSCI emerging equity index from adding significantly to gains. Key Latin American stock indexes and currencies at 1600 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1016.08 0.15 17.66 MSCI LatAm 2576.16 0.98 8.99 Brazil Bovespa 63930.45 1.11 6.15 Mexico IPC 49557.97 0.3 8.58 Chile IPSA 4880.06 0.16 17.55 Chile IGPA 24479.90 0.16 18.07 Argentina MerVal 21919.18 1.08 29.56 Colombia IGBC 10732.49 0.03 5.97 Venezuela IBC 73816.38 -0.42 132.82 Currencies daily % YTD % change change Latest Brazil real 3.2583 0.74 -0.28 Mexico peso 18.5120 -0.04 12.06 Chile peso 671.7 -0.47 -0.15 Colombia peso 2914.67 0.11 2.98 Peru sol 3.275 -0.21 4.24 Argentina peso (interbank) 16.0200 0.48 -0.91 Argentina peso (parallel) 16.27 0.12 3.38 (Editing by Alistair Bell)
UPDATE 9-Police consider manslaughter charges over London blaze as thousands evacuated
* Police fear death toll could rise above 79 (Updates number of people affected, adds political reaction)
UPDATE 1-Corruption charges against Brazil's Temer expected to come in waves -source
June 23 Brazil's top federal prosecutor will level corruption charges against President Michel Temer one at a time instead of making all the accusations at once, a strategy aimed at weakening his defense, a source with direct knowledge of the process told Reuters on Friday.