November 13, 2019 / 3:51 PM / a month ago

EMERGING MARKETS-Chile peso, stocks slide on unrest; big interest rate cut forecast

    * Chile's peso, stocks slide as unrest continues
    * Chile central bank expected to slash rates -poll
    * Trump speech feeds worries about global trade
    * Eletrobras dips after announcing job cuts

    By Sagarika Jaisinghani
    Nov 13 (Reuters) - Chile's peso slid for the fifth straight
session on Wednesday and the country's stocks tumbled more than
2%, as anti-government unrest showed no signs of letting up and
as traders predicted that the central bank would slash interest
rates.
    Most other Latin American currencies eased as a speech by
U.S. President Donald Trump had investors fretting anew about
Washington's trade war with Beijing.
    Chilean stocks were on course for biggest weekly
decline in two years. A Reuters monthly poll of 55 traders
showed on Wednesday that Chile's central bank is expected to
slash interest rates to 1.5% by December and even further in
2020.
    On Tuesday, the Chilean currency hit a record low of
800 to the dollar, and the South American country's finance
minister warned of "grave consequences" for the nation's economy
after three weeks of often violent unrest.
    An index of Latin American currencies dipped
0.6% to its lowest level in one-and-a-half months after Trump,
in an address to The Economic Club of New York, threatened to
impose more tariffs on China if the two sides did not reach a
deal.
    "Trump's comments poured a little bit of cold water on hopes
of that preliminary deal the markets were looking forward to,"
said Edward Glossop, Latin American economist at Capital
Economics in London.
    The Mexican peso dipped about 1% to a one-month low.
 
    Brazil's real shed 0.4% against a stronger dollar.
The currency has been supported this year by hopes of a landmark
pension reform bill that has been President Jair Bolsonaro's top
priority. Brazil's Congress officially ratified the bill into
law on Tuesday.
    "Perhaps investors are growing more skeptical to Bolsonaro's
reform agenda," Glossop said. "The pension reform is past now
and it seems difficult to build that momentum again given
political capital has been largely spent."
    The Mexican central bank meets on Thursday and is widely
expected to cut its benchmark lending rate for the third time
this year, a Reuters poll showed this week.
    Shares of Brazilian retailer Magazine Luiza SA
fell 2.8% after concluding a $1.1 billion share offering, while
state-run utility firm Centrais Eletricas Brasileiras SA
 dropped 2.5% as it said it would cut some jobs as
part of its proposed privatization.
    The companies were the top two decliners on the Brazilian
stock index, which was also pressured by data showing
retail sales volumes, excluding cars and building materials,
came in just shy of economists' expectations.
        
  Key Latin American stock indexes and currencies at 1454 GMT: 
      Stock indexes               Latest    Daily % change
 MSCI Emerging Markets             1043.12            -1.2
                                            
 MSCI LatAm                        2649.40           -1.38
                                            
 Brazil Bovespa                  106005.68            -0.7
 Mexico IPC                       43060.86           -0.09
 Chile SPIPSA                      4447.46           -2.13
                                            
 Argentina MerVal                 33331.24          -0.296
                                            
 Colombia IGBC                    13199.32           -0.75
                                            
                                                          
         Currencies               Latest    Daily % change
 Brazil real                        4.1807           -0.35
                                            
 Mexico peso                       19.5231           -1.11
                                            
 Chile peso                          798.7           -2.19
 Colombia peso                     3449.33           -1.24
 Peru sol                            3.396           -0.44
                                            
 Argentina peso (interbank)        59.7500           -0.08
                                            
 
 (Reporting by Sagarika Jaisinghani and Agamoni Ghosh in
Bengaluru; Editing by David Gregorio)
  
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