EMERGING MARKETS-Latam currencies seesaw on ECB stmulus; Brazil assets up on impeachment bets
SAO PAULO, Dec 3 (Reuters) - Latin American currencies seesawed on Thursday after the European Central Bank announced a new round of monetary stimulus, while Brazilian assets spiked following the opening of impeachment proceedings against President Dilma Rousseff. The ECB cut deposit rates even deeper into negative territory and extended its asset-buying program. High-yielding emerging market assets tend to benefit from the move, but some traders had expected more aggressive measures. The Chilean peso advanced 0.4 percent, while the Mexican peso fell 0.1 percent. Brazil's real currency and stocks jumped after the head of the lower house of Congress on Wednesday accepted a request to start the proceedings against Rousseff. Investors bet that a change in government could help the country overcome what is likely to be its longest recession since the 1930s. However, many analysts warned that political wrangling could delay the government's efforts to balance fiscal accounts and spark a downgrade of the country's debt into junk status by a second rating agency. "The initial reading is that economic policy would change and that change would be for the best," said Luiz Monteiro, a partner at Queluz Asset Management in Rio de Janeiro. "But we have to assess how this situation will develop. How will rating agencies behave in this environment? Will long-term investors wait to see if the economy gets better?" Yields paid on short-term interest rates futures contracts in Brazil rose slightly as traders bet the country's central bank would raise benchmark rates next month. Policymakers said in the minutes of the bank's last rate-setting meeting they would take the necessary measures to bring inflation back to the official target in 2017. Latin American stock indexes and currencies at 1430 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 821.59 -0.02 -14.07 MSCI LatAm 1981.18 2.89 -29.41 Brazil Bovespa 46597.15 3.75 -6.82 Chile IPSA 3617.29 0.34 -6.07 Chile IGPA 17859.65 0.29 -5.36 Argentina MerVal 13028.989 2.54 51.87 Colombia IGBC 8221.27 0 -29.34 Venezuela IBC 12867.46 0 233.46 Currencies daily % YTD % change change Latest Brazil real 3.7820 1.34 -29.73 Mexico peso 16.578 -0.10 -11.06 Chile peso 700 0.46 -13.37 Colombia peso 3138.6 0.71 -23.92 Peru sol 3.3611 0.23 -11.37 Argentina peso (interbank) 9.7100 -0.03 -11.95 Argentina peso (parallel) 14.75 -1.76 -5.08 (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)
© Thomson Reuters 2017 All rights reserved.