EMERGING MARKETS-Latam assets extend gains on Fed caution

miércoles 30 de marzo de 2016 17:37 GYT

(Adds details on currencies, updates prices)
    By Bruno Federowski
    SAO PAULO, March 30 (Reuters) - Most Latin American
currencies and markets strengthened for a second day on
Wednesday as traders bet the Federal Reserve could take longer
than expected to increase U.S. interest rates.
    Fed Chair Janet Yellen on Tuesday said the U.S. central bank
should proceed cautiously in tightening policy, calming
investors' fears that she would take a more hawkish tone.
    Lower U.S. rates for longer boost demand for emerging market
assets such as the Mexican peso, which rose 0.7 percent
to 17.23 per dollar, wiping out its losses for the year.
    The peso in Colombia rose 1.4 percent to 3,013.9 per
dollar, its highest in more than four months, while the
country's benchmark stock index jumped 1.7 percent, its
biggest rise in nearly a month.
    Before Yellen's comments, many investors believed she would
follow a series of Fed policymakers who endorsed a trajectory of
at least two rate increases this year. But Yellen instead
emphasized threats to the world's biggest economy, including low
oil prices and concerns about China.
    Fed funds futures implied traders now expected the Fed to
stand pat until the final quarter of 2016. 
    Brazilian politics remained under the spotlight after the
country's biggest political party split with the governing
coalition, sharply raising the chances of President Dilma
Rousseff's ouster. 
    "The chances of impeachment for Rousseff are about 90
percent. One way or another, the game is pretty much up for
her," Edwin Gutierrez, head of emerging market sovereign debt at
Aberdeen Asset Management, wrote in a client note.
    Many traders believe a change in government could help
rekindle investor trust in Latin America's biggest economy.
Rousseff's popularity remained close to historic lows, a poll
showed on Wednesday. 
    The Brazilian real was also lifted after the central
bank in its auction decided to sell only some reverse currency
swaps, which function like buying dollars in futures markets.
The real rose 0.5 percent, staying close to seven-month highs
hit over the last two weeks.
    The country's benchmark Bovespa stock index also
gained, supported by a rise in shares of state-controlled oil
company Petroleo Brasileiro SA.

    Key Latin American stock indexes and currencies at 2100 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            833.98      2.35      5.02
 MSCI LatAm                      2179.68      2.22     19.12
 Brazil Bovespa                 51248.92      0.18     18.22
 Mexico IPC                     46191.51      0.64      7.48
 Chile IPSA                      3946.47      0.74      7.23
 Chile IGPA                     19326.22       0.7      6.47
 Argentina MerVal               12872.90     -0.43     10.26
 Colombia IGBC                   9759.46      1.67     14.18
 Venezuela IBC                  14865.47      0.97      1.90
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      3.6197      0.47      8.29
 Mexico peso                       17.23      0.68      0.00
 Chile peso                        673.2      1.22      5.14
 Colombia peso                      3014      0.00      4.90
 Peru sol                         3.3661      0.23      1.40
 Argentina peso (interbank)      14.5900      0.55    -12.38
 Argentina peso (parallel)         15.25      0.91     -6.87
 (Additional reporting by Paula Arend Laier and Anna Yukhananov;
Editing by James Dalgleish and Andrew Hay)