EMERGING MARKETS-Latam currencies jump on bargain hunting after Brexit selloff

martes 28 de junio de 2016 11:20 GYT

By Bruno Federowski
    SAO PAULO, June 28 (Reuters) - Latin American currencies
jumped on Tuesday as investors scooped up bargains following a
selloff triggered by Britain's decision to leave the European
    The Mexican peso  strengthened 1.4 percent
after weakening 5 percent over the two previous trading days.
    Nevertheless, the currency remained near its historical
lows, with many analysts forecasting the central bank could
increase interest rates at this week's policy meeting to fight
off price pressures.
    Yields paid on Mexican interest rate futures fell
on Tuesday but still indicated traders saw a better-than-even
chance of a hike on Thursday. 
    "I don't think there is a need to hike but Banxico has put
itself in a corner by focusing on the Mexican peso too much,"
4Cast economist Pedro Tuesta said. "The market has basically
priced in a hike and therefore could be disappointed by the lack
of a hike".
    The Brazilian real soared 2 percent to its strongest
in almost a year, outperforming its regional peers as traders
all but priced out the chance of an interest rate cut in August.
    Brazil's central bank reiterated on Tuesday it has no plans
yet to reduce rates, saying it aims to keep inflation inside the
government's target band this year despite market expectations
it could fail to do so. 
    Traders also perceived hawkish overtones in comments by
central bank governor Ilan Goldfajn later in the day.
    "Those who believed Goldfajn could have a dovish inclination
will have to reassess this conviction," Absolute Investimentos
partner Renato Botto said.
    Brazil's benchmark Bovespa index rose but gains were
limited by a slump in shares of Hypermarcas SA. Local
newspaper Estado de S.Paulo reported on Tuesday a former
executive at the consumer goods maker paid 30 million reais
($9.03 million) in bribes to the ruling PMDB party. 
    Shares of Estácio Participações SA rose 0.7
percent after Reuters reported at least 52 percent of
shareholders in the for-profit college operator have voiced
support for rival Kroton Educacional SA's bid.

    Key Latin American stock indexes and currencies at 15:00
 Stock indexes                                daily %    YTD %
                                               change   change
 MSCI Emerging Markets                805.44     1.37     0.05
 MSCI LatAm                          2142.22     2.85    13.83
 Brazil Bovespa                     49930.94     1.39    15.18
 Mexico IPC                         44756.10     1.07     4.14
 Chile IPSA                          3949.78    -0.39     7.32
 Chile IGPA                         19521.83    -0.34     7.55
 Argentina MerVal                   14100.27     2.36    20.77
 Colombia IGBC                       9752.71     0.78    14.10
 Venezuela IBC                      12882.24    -2.65   -11.69
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.3225     2.12    18.80
 Mexico peso                         18.9505     1.21    -9.08
 Chile peso                            674.2     0.74     5.27
 Colombia peso                        3010.1     1.58     5.29
 Peru sol                             3.3019     0.64     3.40
 Argentina peso (interbank)          14.9000     2.68   -12.87
 Argentina peso (parallel)             15.05     1.79    -5.18
 (Reporting by Bruno Federowski; Additional reporting by
Priscila Jordão; Editing by Andrea Ricci)