EMERGING MARKETS-Brazil rate futures fall ahead of cenbank policy decision
By Bruno Federowski SAO PAULO, Oct 19 (Reuters) - Yields paid on Brazilian interest rate futures fell on Wednesday as traders increased bets that the central bank will cut rates aggressively after market close. Weaker-than-expected data on industrial output and retail, a surprising cut in fuel prices and lower inflation expectations have supported forecasts of a 50 basis point cut in the Selic rate to 13.75 percent. A Reuters poll showed economists were split between a 25 basis point and a 50 basis point cut, with only four out of 50 expecting the central bank to stand pat. Interest rate futures prices implied a higher chance of a 25 basis point cut, though bets on a sharper reduction have been growing. Brazil's currency and stocks rose, supported by global appetite for risky assets as commodity prices rose. The Brazilian benchmark Bovespa stock index advanced 0.2 percent to the highest since 2012. Shares of state-controlled oil company Petróleo Brasileiro SA provided the biggest boost to the index following a surprising drop in U.S. crude inventories. Positive investor sentiment also lifter most Latin American currencies, such as the Chilean and Mexican pesos . Key Latin American stock indexes and currencies at 1510 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 914.03 0.6 14.41 MSCI LatAm 2590.72 0.75 40.54 Brazil Bovespa 63893.97 0.18 47.39 Mexico IPC 48152.03 0.1 12.04 Chile IPSA 4229.58 0.65 14.93 Chile IGPA 21124.07 0.5 16.38 Argentina MerVal 18133.61 1.6 55.32 Colombia IGBC 10106.70 0.76 18.24 Venezuela IBC 13630.08 0.46 -6.57 Currencies daily % YTD % change change Latest Brazil real 3.1674 0.48 24.61 Mexico peso 18.5790 0.16 -7.26 Chile peso 666 0.33 6.56 Colombia peso 2909.17 -0.23 8.94 Peru sol 3.379 0.09 1.04 Argentina peso (interbank) 15.2000 0.07 -14.59 Argentina peso (parallel) 15.57 0.45 -8.35 (Reporting by Bruno Federowski; Editing by Alistair Bell)
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