May 4, 2017 / 4:26 PM / a year ago

EMERGING MARKETS-Brazilian currency, stocks down on political concerns

    By Bruno Federowski
    SAO PAULO, May 4 (Reuters) - Brazil's currency and stocks
fell on Thursday on bets that President Michel Temer's
government could find it harder than expected to pass key
austerity measures in Congress.
    Temer's proposal to reform the country's social security
system cleared a committee vote on Wednesday but still faced an
uphill battle.
    Presidential aides said the government was not certain it
had secured the two-thirds vote needed to approve the bill in a
full vote in the lower house.
    Traders worried that Temer will have to further dilute the
measure, seen as critical to limit the growth of public debt and
lift Brazil from its deepest recession on record, to guarantee
lawmakers' support.
    "The government has already been forced to negotiate
intensely at this point and made multiple concessions," said
Miriam Tavares, a foreign exchange director at AGK brokerage.
    The Brazilian real weakened as much as 1 percent,
while the benchmark Bovespa stock index fell 1.6
    Other Latin American markets also dropped, tracking a
decline in prices of commodities. The Colombian peso
slumped 1.6 percent as oil futures tumbled.
    The slide worsened after OPEC delegates said their group and
other producing countries were downplaying the chance of a
bigger output when the producers meet on May 25, increasing
investor concerns over a global supply glut.
    Iron ore prices also tumbled 8 percent, their biggest daily
fall in more than five months, weighing on shares of miners such
as Brazil's Vale SA
    Key Latin American stock indexes and currencies at 1615 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets                979.03    -0.68    14.32
 MSCI LatAm                          2590.70    -1.96     12.9
 Brazil Bovespa                     65050.90    -1.58     8.01
 Mexico IPC                         49075.83    -0.05     7.52
 Chile IPSA                          4844.24    -0.22    16.69
 Chile IGPA                         24290.78    -0.24    17.15
 Argentina MerVal                   21043.70    -0.79    24.39
 Colombia IGBC                      10202.27        0     0.73
 Venezuela IBC                      58545.92     0.35    84.66
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.1862    -0.95     1.98
 Mexico peso                         19.0370    -0.91     8.97
 Chile peso                            675.3    -0.90    -0.68
 Colombia peso                        2974.5    -1.63     0.91
 Peru sol                              3.271    -0.64     4.37
 Argentina peso (interbank)          15.3750    -0.55     3.25
 Argentina peso (parallel)             15.87     0.13     5.99

 (Reporting by Bruno Federowski; Editing by Paul Simao)
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