REFILE-EMERGING MARKETS-Yields in Mexico, Brazil dip; Latam stocks up
(Refiles to fix typo in reporting credits) MEXICO CITY, March 21 (Reuters) - Yields on Mexican interest rate swaps fell on Friday after the country's central bank dialed back a hint it could raise borrowing costs, while rate futures in Brazil dipped after inflation data met expectations. Mexico's central bank held steady its benchmark interest rate, pointing to slack in the economy while noting that a recent spike in inflation had eased and was unlikely to spur wider price pressures. Policymakers removed language suggesting they could hike if a recent spike in consumer prices had hit inflation expectations. The central bank instead highlighted weakness in the economy that should keep inflation pressures at bay. Yields on interest rate swaps fell after the announcement as investors trimmed bets on a hike later this year. Most economists expect Mexico's central bank to hold borrowing costs steady until the first quarter of 2015. Yields on Brazilian interest rate futures <0#2DIJ:> dropped across the board after mid-month inflation numbers came in line with expectations in a Reuters poll. "It's a correction, because people were pricing in a higher number," said Newton Rosa, an economist with SulAmerica Investimentos in Sao Paulo. Most Latin American currencies rose with investors more willing to take on riskier assets, according to Pedro Tuesta, an economist with research firm 4Cast. Brazil's real gained for the third session in four, edging to its highest level against the dollar in two weeks. The Colombian peso dipped slightly following a five-day rally that saw the currency gain about 2.7 percent against the dollar. Recent gains in the peso have been driven by better-than-expected fourth-quarter economic growth data and an announcement by JPMorgan on Wednesday that it will boost the weighting of Colombia's peso-denominated debt in two closely followed emerging market bond indexes. Colombia's central bank on Friday held its benchmark lending rate unchanged for a 12th straight month, as expected, as it seeks to maintain monetary stimulus while inflation remains benign. Local stocks mostly gained, with the MSCI Latin American stock index rallying for the fifth straight session to close at a nearly two-month high. Mexico's IPC index rose to its highest level in nearly five weeks as stocks capped their best week since late June 2013, rising about 5.5 percent in the last five sessions. Bargain hunters swept into the Mexican stock market this week after the index closed at its lowest since last June last Friday. Latin American stock indexes and currencies at 2240 GMT: Stock indexes daily YTD % % change Latest change MSCI LatAm 2,988.81 0.72 -6.62 Brazil Bovespa 47,380.94 0.22 -8.01 Mexico IPC 40,021.73 1.02 -6.33 Chile IPSA 3,633.20 -0.62 -1.78 Chile IGPA 18,049.07 -0.24 -0.98 Argentina MerVal 6,086.82 2.04 12.91 Colombia IGBC 13,134.57 0.11 0.48 Peru IGRA 14,407.32 -0.32 -8.55 Venezuela IBC 2,334.31 -6.2 -14.70 Currencies daily YTD % % change Latest change Brazil real 2.3237 0.02 1.42 Mexico peso 13.2375 0.17 -1.57 Chile peso 562.0000 0.71 -6.39 Colombia peso 1995.0000 -0.09 -3.16 Peru sol 2.8090 0.21 -0.57 Argentina peso (interbank) 7.9725 -0.09 -18.56 Argentina peso (parallel) 10.9000 0.46 -8.26 (Reporting by Michael O'Boyle in Mexico City, and Asher Levine, Bruno Federowski and Priscila Jordao in Sao Paulo; Editing by Chris Reese and Lisa Shumaker)
© Thomson Reuters 2016 All rights reserved.