August 9, 2016 / 4:11 PM / 2 years ago

EMERGING MARKETS-Latam currencies, stocks up on global search for yield

By Bruno Federowski
    SAO PAULO, Aug 9 (Reuters) - Latin American currencies and
stocks rose on Tuesday as traders kept up demand for higher
yields, with the Brazilian real strengthening to a new one-year
    Investors have been on the hunt for riskier assets since
Friday, when stronger-than-expected U.S. jobs data raised
optimism over the global economy. 
    A separate report on Tuesday showing slower decreases in
Chinese factory prices in July also pleased traders, allaying
concerns of deflation in the world's No. 2 economy. 
    The Brazilian real strengthened past 3.15 per U.S.
dollar for the first time since July 2015.
    The move was magnified by thin trading volumes as many
investors kept to the sidelines as Congress prepared to vote on
key legislation on regional debt. 
    The Senate is also expected to take additional steps in the
impeachment process of suspended President Dilma Rousseff,
advancing toward a final vote by the end of August.
    "All eyes are on Congress today. The votes will be a gauge
of the government's policy clout," said José Carlos Amado, a
trader with Spinelli brokerage.
    In stock markets, traders reacted to a fresh batch of
corporate reports. Shares of airline loyalty program Smiles SA
, the unit of airline Gol Linhas Aéreas Inteligentes
SA, inched up 0.3 percent following a 38 percent
increase in quarterly earnings.
    Mexico's peso jumped as much as 1 percent to the
strongest in one month. Coupled with a smaller-than-expected
increase in annual inflation, the move reduced expectations of
an interest rates increase this week.
    Analysts polled by Reuters expect Mexico's central bank to
hold its key lending rate on Thursday, but increase it by 25
basis points in the fourth quarter. 

    Key Latin American stock indexes and currencies at 1450 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets                901.31     0.65    12.77
 MSCI LatAm                          2478.50     1.47    33.49
 Brazil Bovespa                     57784.06     0.26    33.30
 Mexico IPC                         47717.50     0.74    11.03
 Chile IPSA                          4143.26      0.1    12.58
 Chile IGPA                         20468.15     0.09    12.76
 Argentina MerVal                   15502.79     0.84    32.78
 Colombia IGBC                       9737.23     0.41    13.92
 Venezuela IBC                      12535.74     1.62   -14.07
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.1340     1.04    25.94
 Mexico peso                         18.4000     0.87    -6.36
 Chile peso                            652.4     0.28     8.78
 Colombia peso                       2968.86     0.85     6.75
 Peru sol                              3.299     0.42     3.49
 Argentina peso (interbank)          14.7700    -0.68   -12.10
 Argentina peso (parallel)              15.3     0.20    -6.73

 (Reporting by Bruno Federowski; Editing by Tom Brown)
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