September 5, 2019 / 2:47 PM / 17 days ago

EMERGING MARKETS-U.S.-China trade optimism lift Latam markets; Intervention helps Brazil's real

    By Agamoni Ghosh
    Sept 5 (Reuters) - Latin American assets moved higher on
Thursday after the United States and China agreed to resume
trade negotiations, raising hopes of resolving a long-standing
trade dispute that has caused a global economic slowdown.   
    MSCI's index of Latin American stocks rose
2.4%, led by gains on Brazil's Bovespa index.
    Currencies in commodity export-oriented Latin American
economies that have been battered by the U.S.-China trade war
rose broadly against a soft dollar, but underperformed compared
with emerging market peers in other regions.    
    "Political-economic disruptions to global markets via the
U.S-China trade dispute have pushed weakness in EM," TD
Securities analysts said in a note. 
    "Until we see stabilization in growth momentum and financial
market volatility, it is unlikely we can make a case for strong
performance against the USD in the Latam space," they said.
    The Bovespa rose 1.9%, aided by gains among
financials and energy stocks. The real, which has lost
more than 5% of its value this year, moved 0.3% higher on the
day as intervention by the central bank stabilized the market.  
    Central bank President Roberto Campos Neto said on Thursday
that inflation in Brazil was well-anchored over the short-,
medium- and long-term horizons, giving policymakers room to
reduce interest rates further.
    
    ARGENTINA CRISIS       
    The Argentine peso held steady, supported by capital
controls imposed by Latin America's third-largest economy
earlier this week, which came after the government announced its
plans to "re-profile" some $100 billion in debt.
    The peso has been battered since President Mauricio Macri
suffered a thumping defeat in primaries at the hands of Alberto
Fernandez. 
    Some of Argentina's largest creditors, who met informally
this week according to a Financial Times report, are said to
have concluded that negotiations with Macri's government would
be futile if Fernandez ultimately comes to power in October.
    "Any deal could be torn up by the new government, so that
suggests that we're in a period of limbo until the new
government comes into power,” said Edward Glossop, Latin America
economist at Capital Economics.  

  Latin American stock indexes and currencies at 14:45 GMT
 Stock indexes                             daily % change
                           Latest         
 MSCI Emerging Markets           1003.74             1.33
                                          
 MSCI LatAm                      2670.11             2.27
                                          
 Brazil Bovespa                103052.65             1.83
                                          
 Mexico IPC                     42619.86              0.7
                                          
 Chile IPSA                      4812.72             1.16
                                          
 Argentina MerVal               25956.76             5.39
                                          
 Colombia IGBC                  12682.58            -0.03
                                          
                                                         
 Currencies                                daily % change
                                  Latest  
 Brazil real                      4.0815             0.37
                                          
 Mexico peso                     19.6705             0.22
                                          
 Chile peso                        719.1             0.47
                                          
 Colombia peso                   3371.95             0.63
 Peru sol                         3.3658             0.36
                                          
 Argentina peso                  55.9500             0.13
 (interbank)                              
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting
by Ambar Warrick; Editing by Dan Grebler)
  
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