September 24, 2019 / 3:09 PM / 20 days ago

EMERGING MARKETS-Trade hopes lift Latam currencies, Brazil's real lags

    By Agamoni Ghosh
    Sept 24 (Reuters) - Latin American currencies were mostly
higher on Tuesday as confirmation that planned trade talks
between the United States and China were on schedule bolstered
support for emerging markets, but Brazil's real underperformed
its regional peers. 
    U.S. Treasury Secretary Steven Mnuchin said on Monday that
trade talks with China would resume next week in Washington,
adding the Trump administration had requested Chinese officials
cancel a visit to U.S. farming regions.
    Cancellation of the visit had raised doubts on the course of
progress in trade talks between the two nations. 
    Mexico's peso and Colombia's peso led
currencies in the region higher, up 0.2% each but Brazil's real
 shed 0.3% against the dollar. 
    Minutes from the rate meeting of Brazil's central bank last
week showed that gradual economic growth and persistently low
inflation are likely to pave the way for a further reduction in
interest rates.
    "With a room for rate cuts suggested by recent inflation
simulations, the authority seems poised to provide significant
additional monetary stimuli ahead," said Mauricio Oreng, senior
Brazil strategist at Rabobank. 
    "We look for two more rate cuts of 50bp ahead, with Selic
ending the year at 4.50%."
    The Bovespa fell 0.4% dragged down by shares of
financial companies, while Embraer fell 1.6% after
workers at the Brazilian planemaker's San Jose plant started a
strike that entirely halted production.
    Mexican stocks slid marginally, while the peso rose
0.2%. Data showed consumer price inflation slowed in the first
half of September to its lowest level in three years, increasing
the possibility of rate cut. 
    On Thursday, Mexico's central bank is expected to slash its
benchmark interest rate by 25 basis points for a second time
this year, a Reuters poll showed. 
    Chile's peso flit between negative and positive
territory even as prices of copper, the country's top
export, ticked up.    

    Latin American stock indexes and currencies at 14:28 GMT
    
        Stock indexes                  Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1013.44       -0.18
 MSCI LatAm                               2666.81       -0.57
 Brazil Bovespa                         104189.78       -0.43
 Mexico IPC                              43409.27       -0.22
 Chile IPSA                               5018.15       -0.14
 Argentina MerVal                        28845.31      -0.857
 Colombia IGBC                           12983.50       -0.07
                                                             
           Currencies                  Latest       Daily %
                                                     change
 Brazil real                               4.1731       -0.26
 Mexico peso                              19.4593        0.24
 Chile peso                                 722.2        0.09
 Colombia peso                            3436.74        0.18
 Peru sol                                  3.3478        0.22
 Argentina peso (interbank)               56.9500       -0.04
                                                   
 

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Andrea
Ricci)
  
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