EMERGING MARKETS-Brazil stocks up on impeachment push, Mexico's peso dips
SAO PAULO, Dec 3 (Reuters) - Brazilian stocks on Thursday posted their biggest gain in a month the day after lawmakers in Latin America's largest economy started impeachment proceedings against President Dilma Rousseff. But Mexico's stock index and peso were both down nearly 1 percent on expectations the U.S. Federal Reserve will raise interest rates later this month. Brazil's stock exchange jumped 3.29 percent after the head of the lower house of Congress accepted a request on Wednesday 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. Many analysts warned, however, that political wrangling could delay the government's efforts to balance its fiscal accounts, sparking 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 currencies seesawed on Thursday after the European Central Bank announced a new round of monetary stimulus. 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 Mexican peso fell 0.9 percent to 16.711 pesos per U.S. dollar, while the Chilean peso advanced 0.4 percent to 701.13 per greenback. Latin American stock indexes and currencies at 2300 GMT: Latin American market prices from Reuters Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 819.25 -0.31 -14.33 MSCI LatAm 1964.37 2.01 -27.98 Brazil Bovespa 46393.261 3.29 -7.23 91 Mexico IPC 43027.3 -0.9 -0.27 Chile IPSA 3605.11 0 -6.38 Chile IGPA 17807.01 -0.01 -5.64 Argentina MerVal 12919.56 1.68 50.59 Colombia IGBC 8133.56 -1.07 -30.09 Venezuela IBC 12879.93 0.1 233.79 (Reporting by Bruno Federowski in Sao Paolo and Miguel Angel Gutierrez in Mexico City; Editing by Peter Cooney)
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