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EMERGING MARKETS-Brazil real jumps, Mexican peso gains ground on tight election race

    * Brazil industrial output lifts real 
    * Mexican peso rebounds from sharp declines overnight
    * Russian rouble, South African rand firms

    By Shreyashi Sanyal
    Nov 4 (Reuters) - Brazil's real jumped on Wednesday after
data showed Brazil's industrial output recovering to
pre-pandemic levels, while Mexico's peso rebounded against a
fading dollar as the U.S. presidential election race became too
close to call. 
    The Mexican peso - which had suffered from the Trump
administration's hard line on trade in recent years - rose 0.2%
as prospects increased of swing states going the way of
Democratic candidate Joe Biden. The recovery followed a tumble
of as much as 4% overnight.  
    "Now there is talk that Biden is going to win because a lot
key swing states want those postal votes counted, resulting in a
little bounce in emerging markets," said Chris Shiells, senior
emerging markets analyst at Informa Global Markets. 
    "Emerging markets had priced in a Biden victory, with the
Mexican peso rallying through the month leading up to the
election, it only weakened when it looked like Trump might win
but the race is still quite tight."
    Many emerging market currencies pinballed as investors
reverted from their previous view of a Democrat sweep as states
keep counting mail-in votes, while President Donald Trump
falsely claimed victory and said his lawyers would be taking his
case to the U.S. Supreme Court, without specifying what they
would claim.                 
    The South African rand cut earlier losses to
strengthen 0.2% while Russia's rouble firmed 1.3% with
rising oil prices adding to the momentum.
    China's yuan rebounded from early losses after
President Xi Jinping flagged strong local consumption trends and
said China was moving faster to open up its financial markets.
   
    Brazil's currency - the worst performing
emerging market currency this year - gained 0.9% against the
dollar after industrial production rose a forecast-beating 2.6%
in September. The figures remain consistent with other data that
have shown rapid recovery in the country's manufacturing and
industrial sectors, while Brazil's dominant services sector
lagged. 
    The real has falling nearly 30%, with record low interest
rates adding to the pressure on the currency.
    Stocks across emerging markets took their cue from Wall
Street as investors priced in more fiscal stimulus for the
world's biggest economy with either candidate winning the U.S.
vote.
    "Biden remains a small front-runner and it would appear the
Senate will remain Republican... but with regards to fiscal
stimulus the market believes that a deal of ~$1 trillion is
possible regardless of the ultimate outcome," said Yousef
Abbasi, global market strategist at StoneX.
    The MSCI's EM equities index gained 1.2% and its
Latin American counterpart added 1.7%. 

    Key Latin American stock indexes and currencies at 1551 GMT:
           Stock indexes                   Latest   Daily %
                                                    change
 MSCI Emerging Markets                     1134.77     1.24
 MSCI LatAm                                1891.98     1.69
 Brazil Bovespa                           97645.35     1.74
 Mexico IPC                               37421.08    -0.12
 Chile IPSA                                3503.71     -0.5
 Argentina MerVal                         47678.12   -0.599
 Colombia COLCAP                           1166.48     1.31
                                                           
              Currencies                   Latest   Daily %
                                                    change
 Brazil real                                5.6743     1.51
 Mexico peso                               21.0890     0.05
 Chile peso                                  758.2     0.09
 Colombia peso                             3802.17     0.40
 Peru sol                                   3.5948    -0.11
 Argentina peso (interbank)                79.0300    -0.13
                                                    
 Argentina peso (parallel)                     159     3.77
                                                    
 
    
 (Reporting by Shreyashi Sanyal in Bengaluru; Additional
reporting by Karin Strohecker in London, Editing by William
Maclean)
  

Nuestros Estándares: Los principios Thomson Reuters.

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