May 31, 2017 / 9:59 PM / a year ago

EMERGING MARKETS-Brazil shares track commodities lower, JBS jumps

 (Updates prices, adds Brazil rate cut, Mexico cenbank GDP
    SAO PAULO, May 31 (Reuters) - Brazilian and Mexican stocks
fell on Wednesday, tracking a decline in commodities prices,
while Latin American currencies gained as political tension in
Washington broadly weighed on the dollar.
    Shares of Brazilian iron ore miner Vale SA and
state-controlled oil company Petróleo Brasileiro SA 
fell along with Mexican miner Penoles as world oil
prices slipped to a three-week low on higher output.

    Shares in Brazilian meatpacker JBS SA jumped
after its controlling shareholder struck a leniency deal with
authorities for its part in a corruption scandal.
    J&F has been at the center of a political scandal that
threatens to topple President Michel Temer and has fueled market
volatility in Latin America's largest economy.
    After market close, Brazil's central bank cut interest rates
to a more than three-year low but said it was ready to dial down
the pace of easing as Temer's political crisis threatens
government efforts to plug a widening fiscal gap.
    In a widely-expected move, the bank's monetary policy
committee cut its benchmark Selic rate by 100 basis
points to 10.25 percent. It was the Selic's lowest level since
January 2014.
    Most Latin American currencies strengthened earlier as the
dollar ended May down with its biggest monthly percentage loss
since January amid concerns political scandals will impede the
Trump administration's tax measures.
    Mexico's central bank raised its 2017 growth forecast to
between 1.5 - 2.5 percent after a stronger-than-expected first
quarter, when uncertainty about Trump's policies hung over the
    Caution lingered in Mexican markets, however, ahead of
Sunday's state government elections.
    The leftist party of presidential hopeful Andres Manuel
Lopez Obrador was in a photo-finish race to strip control of
Mexico's most populous state from the country's ruling party,
polls showed on Wednesday.
    Key Latin American stock indexes and currencies at 2110 GMT:
 Stock indexes                             daily    YTD %
                                               %   change
                                Latest    change  
 MSCI Emerging Markets           1005.33   -0.64    16.59
 MSCI LatAm                      2532.31   -1.15     8.19
 Brazil Bovespa                 62711.47   -1.96     4.12
 Mexico IPC                     48788.44   -0.99     6.89
 Chile IPSA                      4855.75   -0.93    16.97
 Chile IGPA                     24354.53   -0.89    17.46
 Argentina MerVal               22348.61    0.17    32.10
 Colombia IGBC                  10678.15   -0.37     5.43
 Venezuela IBC                  75283.76    0.41   137.45
 Currencies                                daily    YTD %
                                               %   change
 Brazil real                      3.2357    0.77     0.42
 Mexico peso                     18.6110    0.51    11.46
 Chile peso                       672.85    0.29    -0.32
 Colombia peso                    2915.4    0.02     2.95
 Peru sol                           3.27    0.37     4.40
 Argentina peso (interbank)      16.1000    0.62    -1.40
 Argentina peso (parallel)         16.34    0.67     2.94
 (Reporting by Bruno Federowski and Michael O'Boyle; Editing by
Andrew Hay)
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