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Mercados

EMERGING MARKETS-Mexico's peso outperforms Latam FX on positive data, dollar auction plans

    * Mexican peso set to outpace peers this week
    * Argentine stocks the sole weekly gainers
    * Colombian stocks fall as political unrest continues

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    By Susan Mathew and Ambar Warrick
    Sept 11 (Reuters) - Mexico's peso led gains among Latin
American currencies on Friday and was set for a fifth straight
week of gains as industrial production data improved in July
from the prior month.
    The currency rose about 0.6%, and was set to add
about 1.2%% for the week, faring better than its peers. Data
showed industrial production rose 6.9% in July on a
month-on-month basis. But growth slowed significantly after
rising 17.9% in June from May.
    "(This) suggests the economic recovery was losing momentum
at the start of the third quarter – a trend which we expect to
continue," said Nikhil Sanghani, an emerging markets economist
at Capital Economics.
    "This will give impetus for the central bank to continue its
easing cycle, especially with little fiscal support on the
horizon."
    Mexico's foreign exchange commission announced two currency
auctions totaling $7.5 billion using a swap line with the U.S.
Federal Reserve, a move that is likely to support the peso.

    The government's unveiling of a fiscally lean 2021 budget
earlier in the week had also helped the currency, which is close
to levels prior to the coronavirus pandemic.
    Brazil' real fell slightly as data showed services
activity in the country rose in July for a second straight
month. The growth, however, was slower than forecast, suggesting
the economy's rebound from the worst of the COVID-19 epidemic
may not be quite so entrenched.
    Ahead of a central bank meeting next week, a Reuters poll
showed the bank will likely hold its key interest rate steady at
2% and adopt a neutral view that is expected to continue until a
tightening cycle begins in the second half of 2021.
    Argentina's peso continued its decline to record low
territory even as rating agencies cheered the government' s
recently clinched debt restructuring deal, with several
provinces preparing to revamp a combined $13 billion in debt.
  
    But Argentine stocks were set to outperform their
regional peers for the week, serving as the only weekly gainers
in the region.
    Other Latin American bourses were set for moderate weekly
losses as volatility on Wall Street undermined sentiment in
equities. The MSCI's index of regional stocks
was set to lose more than 2% this week.
    Colombia's peso rose slightly, while stocks
were set to snap a five-week winning streak as unrest over
police brutality continued.
    
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets         1090.66              0.49
                                        
 MSCI LatAm                    1960.53             -0.54
                                        
 Brazil Bovespa               98394.38             -0.45
                                        
 Mexico IPC                   36348.27              0.46
                                        
 Chile IPSA                    3713.13               0.7
                                        
 Argentina MerVal             45982.95            -1.889
                                        
 Colombia COLCAP               1210.31             -0.77 Currencies             Latest     Daily % change
 Brazil real                    5.3359             -0.34
                                        
 Mexico peso                   21.3057              0.61
                                        
 Chile peso                      770.4              0.27
                                        
 Colombia peso                 3698.29              0.28
 Peru sol                       3.5717             -0.78
                                        
 Argentina peso                74.9000             -0.08
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Marguerita Choy and Richard Chang)
  
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