* Brazil central bank hints at further easing * Brazil April economic activity plummets * Argentina's peso at new low as debt talks stall By Ambar Warrick June 18 (Reuters) - Brazil's real sank on Thursday after a widely expected interest rate cut, while concerns over a resurgence in COVID-19 cases kept broader Latin American markets off balance. The real fell more than 1% after the Monetary Policy Committee cut rates further into record-low territory overnight while indicating that there was still some room for further "residual" trimming to tide the economy through the coronavirus. The bank's signaling of future cuts spelled more real weakness, given that record-low rates have already made it a less-lucrative investment destination. "The Monetary Policy Committee (Copom) judges that with the cut to 2.25% the monetary stimulus 'appears compatible with the economic impact of the COVID-19 pandemic,'" Goldman Sachs analysts wrote in a note. "But the Copom is far from sure that is the case, and the rest of the guidance seems to have shifted the policy needle baseline towards additional easing." Data also showed Brazilian economy activity slumping at a record pace in April due to the pandemic. Brazilian stocks rose about 0.3%, while MSCI's index of Latin American equities fell nearly 1%. Chilean stocks were flat, while the peso sank 1.8%. Sentiment was dented by spiking COVID-19 cases in the United States, while data showed that U.S. jobless claims remained elevated. Safe-haven plays such as the U.S. dollar and the Japanese yen benefited from the risk-off sentiment. Mexico's peso and Colombia's peso retreated as oil prices remained under pressure from fears of weakening demand. "The path forward remains particularly uncertain for energy demand, as a second wave of the virus could keep energy consumption in check. At the same time, evidence is emerging that expectations for market-driven and OPEC+ curtailments are declining," strategists at TD Securities wrote in a note. Argentina's peso weakened to a record low as the country's debt restructuring talks hit a roadblock, with the government determined not to cede further ground after making an improved offer and a key creditor group warning that negotiations had failed. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 995.92 0.13 MSCI LatAm 1935.65 -0.97 Brazil Bovespa 95815.68 0.28 Mexico IPC 37627.13 -0.71 Chile IPSA 3994.76 -0.05 Argentina MerVal - - Colombia COLCAP 1143.71 0.39 Currencies Latest Daily % change Brazil real 5.3280 -1.29 Mexico peso 22.4833 -0.81 Chile peso 810.8 -1.75 Colombia peso 3767.05 -0.73 Peru sol 3.5148 -0.51 Argentina peso 69.7300 -0.07 (interbank) (Reporting by Ambar Warrick in Bengaluru; Editing by Dan Grebler)
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