May 27, 2019 / 7:53 PM / 22 days ago

EMERGING MARKETS-Latam FX broadly weaker amid thin volumes, Bovespa rises

 (Recasts throughout, updates prices, adds comment by market
strategist)
    By Aaron Saldanha
    May 27 (Reuters) - Latin American currencies broadly
softened against the dollar on Monday in trade thinned by a U.S.
market holiday, while a regional stocks benchmark posted its
best day in nearly a week, aided by strong gains in Brazilian
equities.
    Moves in Latin American foreign exchange markets were
amplified due to a lack of liquidity, while stocks in Brazil
were resolute as supporters of President Jair Bolsonaro marched
on Sunday in support of his reform-centric agenda.
    The closure of U.S. financial markets for Memorial Day
reduces liquidity, but also trims the currency speculation
activity associated with the U.S.-China trade war, Gabriela
Siller, director of economic and financial analysis at Banco
BASE, wrote in a note.
    MSCI's Latin American stocks index rose
0.7%.  
    Brazil's real weakened 0.3%. The economy posted a
surprise current account deficit in April, central bank data
showed on Monday.
    Sao Paulo-traded stocks rose 1.3%, helped by gains
among financials and materials stocks.
    Common shares of state-run oil firm Petroleo Brasileiro SA
(Petrobras) rose 1.2% and preferred shares
rose 0.7%, tracking a 1.9% rise in Brent crude futures. 

    Sentiment toward the oil giant was capped by a ruling issued
by a Brazilian Supreme Court minister calling for the suspension
of some major Petrobras divestments, according to a document
seen by Reuters on Monday.
    Miner Vale SA climbed 3.3%. Dalian-traded iron
ore futures hit a fresh record peak earlier in the global day on
supply fears, with stocks of the steel-making ingredient at
China's ports shrinking.    
    The Mexican peso dipped 0.1%, while stocks
slid 0.2%.
    Chile's peso fell 0.6%, while stocks
declined 0.5%. 
    Argentina's peso weakened, while shares rose
0.6% on gains among energy stocks.
    Colombia's peso treaded water, seeing its weakest
trading volumes in more than a month, while stocks slid
1%.
    Oil firm Ecopetrol SA fell 1.7%, with the surge in
Brent futures proving an insufficient support to the stock.
    Fitch Ratings affirmed Ecopetrol's long-term default rating
at "BBB" but revised its rating outlook to negative from
stable.

    Latin American stock indexes and currencies at 1927 GMT
    
 Stock indexes                           daily %
                             Latest       change
 MSCI Emerging Markets          988.82      0.22
                                        
 MSCI LatAm                    2599.52      0.67
                                        
 Brazil Bovespa               94814.47      1.27
                                        
 Mexico IPC                   42522.50     -0.22
                                        
 Chile IPSA                    4857.86     -0.48
                                        
 Argentina MerVal             35294.71       0.6
                                        
 Colombia IGBC                12024.66     -0.98
                                        
                                                
 Currencies                              daily %
                                          change
                                Latest  
 Brazil real                    4.0353     -0.52
                                        
 Mexico peso                   19.0601     -0.10
                                        
 Chile peso                      698.5     -0.57
                                        
 Colombia peso                 3357.43      0.00
 Peru sol                        3.352     -0.24
                                        
 Argentina peso                44.9000      0.00
 (interbank)                            
                                        
 

 (Reporting by Aaron Saldanha in Bengaluru
Editing by Matthew Lewis)
  
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