EMERGING MARKETS-Brazil real falls on weak consumer confidence; Latam FX logs weekly gains

    * Brazilian real still set for weekly rise
    * Mexican peso up after retail sales rise for fourth month  
    * Morgan Stanley bullish on emerging FX and sovereign credit
    * EM stocks see biggest inflows in 6 weeks - BofA flows data

 (Updates prices throughout)
    By Shreyashi Sanyal
    Oct 23 (Reuters) - Brazil's real lost ground on Friday after
a weak reading on consumer confidence, although Latin American
currencies were still set to end the week higher as the dollar
headed for a weekly loss. 
    The Brazilian real fell 0.5% after a survey
showed consumer confidence fell in October for the first time in
six months, suggesting the economy's recovery may be losing
steam. The real is still set for a weekly gain of 0.9%.

    Emerging markets FX strategists at Citigroup said October's
consumer confidence was still below pre-COVID-19 levels and now
expect Brazil's fourth quarter GDP growth to show a significant
deceleration following the robust expansion in the third
    The MSCI's index for Latin American currencies
 is set for a weekly rise of 0.7%, with pesos of
Chile and Colombia outperforming peers, to rise
about 2% each for the week. 
    A weakening dollar, heading for a weekly decline following
the final U.S. presidential debate, has helped boost demand for
riskier assets.
    Investors are now bracing for the Nov. 3 U.S. presidential
election, with analysts pointing to a Democratic victory as a
more favorable outcome for emerging markets.  
    Morgan Stanley said it was time to ramp up exposure to
emerging market currencies and hard-currency sovereign debt,
with a shift of focus to the vaccine trade after the U.S.
election potentially giving developing assets a boost.

    Emerging market stocks saw inflows of $2.7 billion, the
largest in six weeks, while emerging market debt saw strong
inflows of $2.2 billion, Bank of America said in a note on
Friday, citing EPFR data. Investors piled in to EM equities and
bonds in the week to Oct. 21.
    The International Monetary Fund last week revised up its
forecast for the global economy but warned that the outlook was
worsening for many emerging markets.
    Mexico's peso rose 0.4% against the dollar after data
showed retail sales rose in August by 2.5% from July, the fourth
monthly increase in a row, as consumer spending continues to
recover from the effects of the coronavirus pandemic.

    Argentina's peso weakened. The country's economy
minister Martin Guzman vowed to maintain a slow rate of currency
devaluation despite rising pressure on the peso and tumbling
foreign reserves.
    Argentine bondholder groups slammed the government on
Thursday over economic policies they said were undermining
investor confidence in the country, which emerged from a
sovereign default in September after a $65 billion
    Key Latin American stock indexes and currencies at 1851 GMT:
             Stock indexes                     Latest   Daily %
 MSCI Emerging Markets                         1136.38    -0.01
 MSCI LatAm                                    1969.27     -0.6
 Brazil Bovespa                              101477.57    -0.43
 Mexico IPC                                   38754.37     0.26
 Chile IPSA                                    3801.67    -0.25
 Argentina MerVal                             51625.17    -0.09
 Colombia COLCAP                               1171.27    -0.56
                Currencies                     Latest   Daily %
 Brazil real                                    5.6199    -0.49
 Mexico peso                                   20.8480     0.48
 Chile peso                                      776.6     0.30
 Colombia peso                                  3787.5    -0.15
 Peru sol                                       3.5967     0.14
 Argentina peso (interbank)                    78.1200    -0.06
 Argentina peso (parallel)                         191    -0.52

 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Chizu Nomiyama and Tom Brown)

Nuestros Estándares: Los principios Thomson Reuters.