June 8, 2016 / 2:52 PM / 2 years ago

EMERGING MARKETS-Latam stocks, currencies soar on strong China imports data

By Bruno Federowski
    SAO PAULO, June 8 (Reuters) - Latin American stocks and
currencies soared on Wednesday as stronger-than-expected Chinese
trade data added fuel to a rally driven by shrinking
expectations of near-term U.S. rate increases.
    Imports by the world's biggest consumer of commodities fell
only 0.4 percent from a year earlier in May, the smallest
decline since November 2014. Economists polled by Reuters had
estimated a 6 percent drop. 
    The data lifted prices of basic products across the board,
boosting demand for currencies from materials-heavy regions such
as Latin America.
    Crude oil  extended its rally to eight-month
highs, also helped by supply disruptions in Nigeria. 
    Oil-heavy Colombia's peso strengthened for a fifth
consecutive day, while the Mexican peso  advanced
1.2 percent.
    Emerging market currencies have found support in weak U.S.
data and comments by U.S. Federal Reserve Chair Janet Yellen
that dashed bets on an interest rate hike as soon as this month.
    Brazil's real currency jumped on Wednesday to its
strongest in more than 10 months, past 3.40 to the greenback,
surprising many traders who believed the central bank would not
allow the currency to strengthen further.
    Ilan Goldfajn, who was approved to become head of the
country's central bank on Tuesday, defended the floating
exchange rate, triggering a rally in the Brazilian currency.
    Expectations of capital inflows stemming from a $1.25
billion bond issue by Vale SA, the miner's first
international sale in over three years, also supported the real.
    Ativa brokerage trader Arlindo Sá said the real could
strengthen further if Brazil's political crisis cools.
    Scandals involving key officials in interim President Michel
Temer's administration have sparked concerns over his ability to
pass tough austerity measures in Congress.
    Brazil's benchmark Bovespa stock index rose,
supported by shares of state-controlled oil company Petróleo
Brasileiro SA. 
    Petrobras, as the company is known, has kicked off the sale
of a network of liquefied natural gas terminals and thermal
power plants as part of efforts by the indebted firm to cut
    "This is another important step in the company's
deleveraging plans," Guide Investimentos analysts wrote in a
client note.
    Key Latin American stock indexes and currencies at 1410 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               843.47     0.91     5.26
 MSCI LatAm                         2206.19     3.03    17.03
 Brazil Bovespa                    51238.67     1.49    18.20
 Mexico IPC                        46384.68     0.56     7.93
 Chile IPSA                         4033.88     0.48     9.61
 Chile IGPA                        19870.71     0.44     9.47
 Colombia IGBC                      9904.68     0.88    15.88
 Venezuela IBC                     15430.40    -0.94     5.77
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.3996     1.42    16.10
 Mexico peso                        18.1540     1.13    -5.09
 Chile peso                           671.9     0.98     5.63
 Colombia peso                      2894.47     1.61     9.49
 Peru sol                            3.2739     0.83     4.28
 Argentina peso (interbank)         13.8600    -0.14    -6.33
 Argentina peso (parallel)            14.14     0.14     0.92
 (Reporting by Bruno Federowski; Editing by Dan Grebler)
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