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EMERGING MARKETS-Peru's sol cheers rate hike as Latam assets join global rally

    * Peru cenbank hikes interest rate by 50bps
    * Mexican industrial production rises as does Brazil retail
sales
    * LATAM Airlines slumps 8%
    * Brazil's CSN rises on $1 billion deal with Holcim

    By Susan Mathew
    Sept 10 (Reuters) - Most Latin American currencies and
stocks firmed on Friday in line with global markets on signs
that the United States and China are attempting to repair frayed
ties, while Peru's sol hit an over two-week high following an
interest rate rise overnight. 
    The sol rose 0.5% after a 50 basis points hike by the
central bank on Thursday to 1%. This is the second rate hike in
a row as the country battles a post pandemic pick-up in
inflation. 
    The bank said it expects inflation to return within target
in the next 12 months. It said that Thursday's hike does not
necessarily imply "a cycle of successive rate hikes", but it
also took off from its statement the need to maintain an
expansionary monetary policy stance.
    "We read these two statements as hinting the intention to
move the policy rate towards neutrality but not necessarily
through a front-loaded continuous rate normalization cycle,"
Goldman Sachs analysts wrote in a note.
    "Additional near-term rate hikes are likely given the
deterioration of the current and prospective inflation and
exchange rate outlook."
    Several emerging market central banks have embarked on a
hiking cycle to stave off inflation, with Russia's 25bps hike on
Friday being the latest.    
    Mexico's peso extended gains to a third straight
session, up 0.4%, bolstered by positive industrial production
data, while Brazil's real extended previous session's
strong gains as retail sales rose in July. 
    News of a phone call between the presidents of the United
States and China was welcomed after the severely strained ties
between the two nations under former U.S. President Donald Trump
had led to a trade war that slowed global growth and hammered
markets. 
    The Brazilian real was set to end a very volatile week about
0.3% lower. Overnight it jumped 2.4% after President Jair
Bolsonaro stepped back from his feud with the Supreme Court. A
trucker's strike, which has disrupted routes for export items,
will end on Sunday, he said. 
    Among stocks, Brazilian steelmaker CSN rose
almost 3% after agreeing to by world's largest cement maker
Holcim's Brazil business for $1 billion.
    Chile's LATAM Airlines slumped 8%. Latin America's
largest carrier said it has received several offers to fund its
exit from Chapter 11 bankruptcy. Each of the offers are worth
more than $5 billion, less than the company's claims estimates
of between $8 billion and $9.9 billion.
    A source said LATAM has no intention of pursuing a sale of
any of its business units.
    
    Key Latin American stock indexes and currencies at xx GMT:
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets      1313.20     1.02
                                     
 MSCI LatAm                 2423.36     1.34
                                     
 Brazil Bovespa           115899.08     0.47
                                     
 Mexico IPC                51608.02     0.41
                                     
 Chile IPSA                 4468.04     1.38
                                     
 Argentina MerVal              0.00        0
                                     
 Colombia COLCAP            1322.09    -0.05
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 5.2090     0.34
                                     
 Mexico peso                19.8542     0.32
                                     
 Chile peso                   790.7     0.38
                                     
 Colombia peso              3837.48     0.10
                                     
 Peru sol                    4.0846     0.15
                                     
 Argentina peso             98.0800    -0.02
 (interbank)                         
                                     
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Angus
MacSwan)
  
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