July 15, 2020 / 7:20 PM / 19 days ago

EMERGING MARKETS-Brazil stocks at over 4-mth high; Chilean c.bank meeting awaited

    * Latam currencies make small moves against dollar
    * Chilean stocks fall
    * Latam set for deep recession, slow recovery

 (Adds background, updates prices)
    By Shreyashi Sanyal and Ambar Warrick
    July 15 (Reuters) - Brazilian stocks hit a more than
four-month high on Wednesday as signs of progress in developing
a coronavirus vaccine invited more buying into risk-driven
assets, even as COVID-19 cases piled.
    The Bovespa stock index rose about 1% to its highest
level since early March, propped up by financial and energy
stocks.
    Most Latin American bourses gained after Moderna Inc
 flagged positive data from its trials for a COVID-19
vaccine, while reports of potential positive news on initial
trials of the University of Oxford's COVID-19 vaccine also
helped.
    "Hope is sky high that a vaccine will be in place by the end
of the year and that is driving the reopening trade again,"
Edward Moya, senior market analyst for the Americas at OANDA,
wrote in a note.
    Chilean stocks bucked the trend, falling 3% on
protests in support of a proposal to allow Chileans to withdraw
part of their pensions during the COVID-19 crisis. The bill was
approved by lawmakers, with a Senate vote to follow soon.

    Markets also awaited a central bank decision on its
benchmark lending rate, which is expected to remain unchanged,
after a series of successive cuts earlier in the year due to
economic stress from the pandemic.
    "We expect the monetary policy committee to keep the policy
rate at the 0.50% effective lower bound and continue to signal
the maintenance of the current stance for a prolonged period,"
Goldman Sachs analysts wrote in a note.
    The Chilean peso edged up against the dollar, while
most other currencies in the region marked small moves as
optimism over a vaccine was undercut by a continued spike in
coronavirus cases in the continent. 
    A United Nations agency said in a report issued on Wednesday
the pandemic will swell the ranks of the poor and unemployed in
Latin America and the Caribbean and drag the region's economic
output down by 9.1%.
    A Reuters poll also showed a historic recession in Latin
America will likely drag on before Brazil, the region's No. 1
economy, starts fixing a dire budget shortfall that tops the
list of threats along with the coronavirus pandemic.

    Currencies of oil exporters Mexico and Colombia
 edged higher on rising crude prices, even as geopolitical
tensions between the United States and China flared.
    
    Key Latin American stock indexes and currencies: 
    
    Stock indexes             Latest       Daily % change
 MSCI Emerging Markets         1064.43                   0.46
                                        
 MSCI LatAm                    1989.72                   1.87
                                        
 Brazil Bovespa              101456.74                   1.01
                                        
 Mexico IPC                   36627.11                   1.21
                                        
 Chile IPSA                    4057.51                  -2.95
                                        
 Argentina MerVal             44928.45                  2.106
                                        
 Colombia COLCAP               1145.50                   0.08
                                        
                                                             
       Currencies             Latest       Daily % change
 Brazil real                    5.3760                  -0.56
                                        
 Mexico peso                   22.3661                   0.34
                                        
 Chile peso                      783.9                   0.26
                                        
 Colombia peso                 3608.57                   0.39
 Peru sol                       3.4937                   0.12
                                        
 Argentina peso                71.3500                  -0.07
 (interbank)                            
                                        
 
 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Alistair Bell and Richard Chang)
  
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