November 29, 2017 / 4:23 PM / a year ago

EMERGING MARKETS-Brazil stocks, currency down on pension reform worries

    By Bruno Federowski
    SAO PAULO, Nov 29 (Reuters) - Brazil's stocks and currency
fell on Wednesday, extending a recent trend of heightened
volatility as traders seek new clues about the odds that
Congress will approve a plan to streamline the social security
    Presidential Chief of Staff Eliseu Padilha said the
government is unwilling to further water down the controversial
bill, after repeatedly doing so in order to garner lawmaker
    His remarks worried traders who feared President Michel
Temer's administration will not manage to get enough votes with
the measure, which they see as critical to boosting long-term
economic growth, as it stands.
    "The market read this as a sign that the government has no
resources left to convince lawmakers to vote for the plan," said
a trader at a São Paulo-based brokerage.
    The current version of the pension reform plan would
generate fiscal savings of around 60 percent of the government's
original proposal.
    Brazil's benchmark Bovespa stock index fell 1.3
percent, leading losses among equity markets in Latin America on
declines in blue-chips such as lenders Itaú Unibanco Holding SA
, Bradesco SA and state-controlled oil
company Petróleo Brasileiro SA.
    The Brazilian real slipped 0.3 percent, in line with
similar moves in the Chilean and Colombian pesos
    Strong U.S. third-quarter economic growth data and signs of
progress in U.S. Republicans' efforts to get a tax bill passed
fueled expectations of inflationary pressure in the United
States which could force the Federal Reserve to hike interest
    Higher rates could dampen demand for emerging market
currencies, which typically lure foreign investors with high
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                                 daily %   YTD %
                                    Latest      change  change
 MSCI Emerging Markets                1141.06    -0.47   32.96
 MSCI LatAm                           2785.24    -0.77   19.92
 Brazil Bovespa                      73161.61    -1.32   21.48
 Mexico S&P/BVM IPC                  47235.03     0.01    3.49
 Chile IPSA                           5043.52    -0.35   21.49
 Chile IGPA                          25359.97    -0.34   22.31
 Argentina MerVal                    26851.59    -0.23   58.72
 Colombia IGBC                       10815.71     0.08    6.79
 Venezuela IBC                        1089.50    27.94  -96.56
 Currencies                                    daily %   YTD %
                                                change  change
 Brazil real                           3.2159    -0.27    1.04
 Mexico peso                          18.5125     0.16   12.05
 Chile peso                             642.8    -0.27    4.34
 Colombia peso                        3003.93    -0.39   -0.08
 Peru sol                               3.232     0.03    5.63
 Argentina peso (interbank)           17.4150    -0.14   -8.84
 Argentina peso (parallel)              18.06     0.44   -6.87
 (Reporting by Bruno Federowski; Editing by Susan Thomas)
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