August 21, 2019 / 7:54 PM / 5 months ago

EMERGING MARKETS-Latam assets rise as focus shifts to Fed

 (Updates prices; adds market strategist's quote)
    * EM assets up ahead of Powell statement 
    * Latam stocks rise in line with global equities
    * Argentina's peso lags Latam FX peers 

    By Agamoni Ghosh
    Aug 21 (Reuters) - Latin American stocks and currencies rose
on Wednesday as investors hoped central bankers around the world
convening for an annual symposium held by the U.S. Federal
Reserve would signal more concrete measures to counter the
rising prospect of a global recession. 
    MSCI's index of Latin American stocks rose
over 1%, tracking a global rally in riskier assets.
    Minutes from the U.S. Federal Reserve's last policy meeting
released on Wednesday showed that policymakers debated cutting
interest rates more aggressively, although they wanted to avoid
the appearance of being on a path to more rate cuts.
    "Although the minutes were closely watched it did not have
much of an impact on markets given its take-away is historical
now," said Christian Lawrence, senior FX strategist, Latam at
    Investors are now looking ahead to the U.S. Federal
Reserve's annual economic symposium in Jackson Hole, Wyoming,
starting on Thursday, which will bring together central bankers
from around the world. Investors hope that by the symposium's
end central bankers, including Fed Chair Jerome Powell, will
have more clues to offer on the interest-rate outlook.  
    "Powell will be careful to not signal the start of an
aggressive easing cycle given the Trump rhetoric on the Fed
chairman, which could result in rates reacting for a short
period of time," said Lawrence. "But we expect an aggressive
policy easing nonetheless, with two more rate cuts by the end of
this year."
    Sao Paulo-traded stocks rose 0.7% with shares of
state-controlled power utility Eletrobras jumping
over 12% after Brazilian House Speaker Rodrigo Maia said
Congress will renew efforts to privatize the company.

    The Brazilian real rose 0.6%, leading gains among
regional peers, after the central bank sold $200 million in the
spot currency market for the first time in a decade.
    The move is part of the central bank's recently revised
policy of intervening in the foreign exchange market, where it
will sell dollars - along with existing sales of reverse
currency swaps - to meet rising demand due to market volatility.
    Mexico's peso rose 0.3%, while Colombia's peso
scaled a two-week high, getting an additional boost from higher
oil prices.
    Argentina's stocks attempted a recovery from a 10%
fall in the previous session, but the peso fell half a
    Ratings agency Fitch said on Wednesday that the peso's steep
fall last week will gravely affect investor confidence and
re-accelerate inflation with potential for sharper deterioration
in economic growth.

 Key Latin American stock indexes and currencies at 1930 GMT

 Stock indexes                                 daily % change
 MSCI Emerging Markets           984.09                  0.41
 MSCI LatAm                     2626.78                   1.7
 Brazil Bovespa               101217.94                  2.01
 Mexico IPC                    40040.25                  0.86
 Chile IPSA                     4795.92                   0.4
 Argentina MerVal              27849.62                 2.273
 Colombia IGBC                 12581.67                  0.09
 Currencies                                    daily % change
 Brazil real                     4.0231                  0.66
 Mexico peso                    19.6932                  0.35
 Chile peso                         711                 -0.30
 Colombia peso                  3380.38                  0.74
 Peru sol                         3.376                  0.18
 Argentina peso                 54.9700                 -0.52

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Leslie Adler)
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