October 22, 2019 / 2:35 PM / 8 months ago

EMERGING MARKETS-Most Latam FX firm, Chile markets recover after slide

    By Susan Mathew
    Oct 22 (Reuters) - Most Latin American currencies firmed on
Tuesday, while Chilean markets recovered assuaged by President
Sebastian Pinera's willingness to listen to demands by
protesters after violence over the weekend hammered markets last
    Chile's peso traded steady after a 2.7% slump on
Monday - its worst day in more than six years, while a more than
1% jump in stocks came after a 4.6% dive which was its
biggest one-day drop in almost two years.   
    Pinera said he would meet opposition leaders to forge a "new
social contract" to alleviate inequality as thousands of
Chileans defied a military curfew in protest marches around the
    Violent protests over the weekend were sparked by a raise in
public transport fares and were more broadly against higher cost
of living, and prompted the president to place Santiago and few
other cities under emergency. 
    Other regional currencies moved higher against a firmer
dollar, in line with broader emerging markets. Risk sentiment
was boosted by encouraging comments out of Washington and China
on progress in trade negotiations which bolstered expectations
of a partial deal being signed next month.

    Brazil's real jumped 1% with investors keenly
awaiting results of a final Senate vote on the government's
pension reform bill expected to take place later in the day.

    If approved, it clears the way to pass the pension bill -
seen as a vital signal to financial markets that Brazil is
serious about restoring fiscal discipline. The bloated pension
system is the main cause of the government's unsustainable
budget deficit.
    Stocks in Sao Paulo rose 0.9% with education company
Yduqs leading gains as it continued last session's
rally post a $467 million acquisition.
    A measure of Brazilian inflation this month fell to its
lowest in over 20 years, figures on Tuesday showed, cementing
the view that the central bank will cut interest rates to a
fresh all-time low next week. 
    In Argentina, presidential front-runner Alberto Fernandez
called on incumbent Mauricio Macri to keep the peso stable after
general elections on Sunday, and avoid a repeat of the currency
crash that followed the August primary.
    Fernandez blew past business-friendly Macri in the primary,
setting the stage for an expected outright victory in the
presidential election on Oct. 27. The peso plunged more than 30%
over the next few days, as investors feared return of populist
policies under Fernandez.
    The election results could unleash volatility once more, a
Reuters poll of 14 economists showed.
    Key Latin American stock indexes and currencies at 1415 GMT:
   Stock indexes            Latest    Daily %
 MSCI Emerging Markets       1034.07     0.54
 MSCI LatAm                  2756.48     1.44
 Brazil Bovespa            106932.52     0.86
 Mexico IPC                 43514.47     0.25
 Chile IPSA                  4998.64     0.92
 Argentina MerVal                  -        -
 Colombia IGBC              12919.03    -0.56
       Currencies           Latest    Daily %
 Brazil real                  4.0870     1.05
 Mexico peso                 19.0999     0.08
 Chile peso                   727.41     0.07
 Colombia peso               3432.09     0.43
 Peru sol                     3.3328     0.12
 Argentina peso              58.6500    -0.24
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
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