June 19, 2020 / 7:35 PM / 14 days ago

EMERGING MARKETS-Latam stocks, FX rise; Brazil's real underperforms peers for the week

    * Real to lose around 5% for the week
    * Colombia's peso the sole weekly gainer
    * Argentine stocks set for worst week in nearly two months

 (Adds comment, updates prices)
    By Ambar Warrick and Susan Mathew
    June 19 (Reuters) - Latin American stocks and currencies
ticked up on Friday, with most currencies set for steep weekly
losses as political ructions and fears of the coronavirus pushed
money into safe havens.
    Brazil's real, which was up around 1.4% for
the day, underperformed its peers by a wide margin for the week,
with a weekly loss of around 5%.
    A string of weak economic data and political uncertainty
pressured the currency through the week, with the Brazilian
central bank signaling more potential rate cuts, prompting a
strong sell-off on Thursday. 
    Fears of a second wave of COVID-19 infections in major
economies affected emerging market currencies through the week,
with Latin American currencies bearing a bulk of the selling as
cases in the region spiked.
    "Whether or not the market wants to deal with it, COVID is a
theme that is likely to stick with us for quite some time.
Besides the obvious, it's worse than the trade war theme of
2019, reflecting a new and more profound level of uncertainty,"
wrote Mark McCormick, global head of FX strategy at TD
Securities.
    Mexico's peso and Colombia's peso both rose,
tracking stronger oil prices as OPEC producers and allies
promised to meet supply cuts, while demand appeared to be
improving in major economies.
    Still, U.S. sanctions on certain Mexican companies saw
Mexico's peso set to lose about 1.6% for the week, while
Colombia's peso was the sole Latam currency set for a weekly
gain.
    Meanwhile, equities rose, with the MSCI's index of regional
stocks adding 0.8%.
    Monetary support in major economies such as the United
States and Japan inspired some confidence in equities this week,
with most regional bourses set to end the week higher.
    Argentine stocks, however, were set for their worst
week in three months amid hiccups in talks between the
government and creditors to restructure the country's $65
billion debt. Most analysts expect the two sides to find a way
to bridge the divide.  
    For the upcoming week, June's mid-month inflation data from
Brazil and a central bank interest rate meeting in Mexico will
be eyed. 
    Monex Europe's FX market analyst Olivia Alvarez Mendez
expects a 50-basis-point cut given the comfortable inflation
outlook in Mexico, and expects the central bank to remain in a
cautious yet accommodative stance compared with other major
central banks as the country faces its worst recession in
decades. 
    
    Key Latin American stock indexes and currencies 1915 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1001.80     0.67
                                   
 MSCI LatAm               1955.21     1.45
                                   
 Brazil Bovespa          96474.32     0.36
                                   
 Mexico IPC              38295.13     1.76
                                   
 Chile IPSA               4021.27     0.76
                                   
 Argentina MerVal        39935.16    5.119
                                   
 Colombia COLCAP          1144.49     0.48
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.2959     1.40
                                   
 Mexico peso              22.5837     0.70
                                   
 Chile peso                 815.4     0.05
                                   
 Colombia peso            3745.32    -0.04
                                   
 Peru sol                  3.5008     0.57
                                   
 Argentina peso           69.7900    -0.07
 (interbank)                       
                                   
 
 (Reporting by Ambar Warrick in Bengaluru; editing by Jonathan
Oatis)
  
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