June 26, 2019 / 7:59 PM / 3 months ago

EMERGING MARKETS-Most Latam currencies firm on trade optimism, stocks largely down

 (Updates prices)
    By Susan Mathew
    June 26 (Reuters) - Latin American stocks mostly fell and
Brazil's real traded flat on Wednesday, while most other
regional currencies firmed on measured optimism around the
Sino-U.S. trade dispute.
    Against a steady dollar, most Latam currencies recovered
from losses logged last session after comments by U.S. Federal
Reserve officials quashed hopes of a half-point cut in interest
rates.
    Mexico's peso firmed 0.5% after three days of losses,
while Colombia's currency rose 0.1% with support from
rising oil prices. Chile's peso climbed 0.3%.
 
     Trade optimism centered around U.S. Treasury Secretary
Steven Mnuchin's comment in a CNBC interview that Washington and
Beijing were 90% through in making a trade deal, which U.S.
President Donald Trump later reiterated.
    Trump said it was possible he would emerge with a deal from
a meeting with Chinese leader Xi Jinping this weekend, after
earlier threatening to impose "very substantial" tariffs on
China if a deal couldn't be reached at the meeting.
    Some analysts still remained skeptical.
    "Given the differences between the two sides, we suspect
that any truce will prove temporary. The conclusions of the
summit itself are likely to be vague," wrote Jennifer McKeown,
head of global economics service at Capital Economics. 
    The trade dispute has dominated market moves for almost a
year and contributed to a slowdown in global growth.

    Brazil's real was little changed on the day. 
    The country's primary budget deficit widened more than
expected in May, the Treasury said - further evidence of urgency
in the need to pass the bill that overhauls the country's
bloated pension system.
    The bill is expected to go to a vote in congressional
committee as soon as Thursday. Presidential spokesman Otavio
Rego Barros said on Tuesday the lower house of Congress would
vote on the reform before lawmakers break for recess on July 18.

    Analysts broadly expect the real to remain pressured until
the pension reform bill is passed.
    Stocks in Brazil rose 0.4% with miner Vale
 gaining despite a slip in iron ore prices.
    A Vale executive said it will spend 1.8 billion reais ($469
million) on safety and environmental recovery measures for the
structures that remain standing near its Brumadinho dam that
collapsed five months ago, killing nearly 250 people.

    Mexican shares slipped marginally. Energy
infrastructure firm IEnova fell the most, down 3.6% 
after it said state power utility CFE had requested arbitration
on a dispute over a natural gas pipeline.
    In Argentina, the peso slipped 0.9% after three days
of gains when it added 2.6%, while stocks slipped for
the first time in six days, down 0.9%.
       
    Key Latin American stock indexes and currencies at 1941 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1048.67      0.32
                                        
 MSCI LatAm                    2840.62      0.02
                                        
 Brazil Bovespa              100495.48       0.4
                                        
 Mexico IPC                   43766.64     -0.06
                                        
 Chile IPSA                    5086.71     -0.23
                                        
 Argentina MerVal             39917.67     -0.93
                                        
 Colombia IGBC                12616.23     -0.28
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8473      0.10
                                        
 Mexico peso                   19.1240      0.50
                                        
 Chile peso                      679.4      0.21
                                        
 Colombia peso                 3181.28      0.14
 Peru sol                        3.293      0.33
                                        
 Argentina peso                42.7000     -0.70
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Cynthia
Osterman)
  
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