June 6, 2017 / 4:46 PM / in a year

EMERGING MARKETS-Brazil yields fall after central bank minutes

    By Bruno Federowski
    SAO PAULO, June 6 (Reuters) - Yields on Brazilian interest
rate futures contracts fell on Tuesday after the minutes from
the central bank's latest policy meeting reaffirmed its
intention of slowing down the pace of rate cuts next month.
    According to the meeting minutes released on Tuesday, the
bank's growing uncertainty over President Michel Temer's reform
agenda prompted policymakers to signal a slower pace of policy
    The bank's nine-member monetary policy committee, known as
Copom, last week decided to lower its benchmark Selic rate
 by 100 basis points to 10.25 percent. 
    Yields on interest rate futures reflect traders expectations
for a smaller 75-basis-point cut in the bank's July meeting,
with a smaller chance of a 50-basis-point reduction.
    The prospect of a slower pace of cuts helped foster demand
for the Brazilian real, but the currency's gains were
limited by concerns over the implementation of structural
reforms - seen as critical to curbing debt growth - amid a
widening political scandal.
    An electoral court is set to begin later on Tuesday a trial
over alleged illegal funding of former President Dilma
Rousseff's 2014 campaign. The ruling could potentially oust
Temer, who ran as Rousseff's vice president.
    Brazil's benchmark Bovespa stock index rose
slightly, supported by rising shares of meatpacker JBS SA
 after its operations in Argentina, Paraguay and
Uruguay to rival Minerva SA for $300 million.

    Mexico's peso extended gains for a second straight
day following reports that was close to announcing it had
reached a deal with the United States over the trade of sugar
between both countries.
    Concerns over U.S.-Mexico trade have weighed on the currency
since the election of President Donald Trump, who has pledged to
abandon the NAFTA trade pact.
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes               Latest       Daily     YTD
                                            pct     pct
                                         change  change
 MSCI Emerging Markets        1,015.28    -0.23   18.01
 MSCI LatAm                   2,547.12     0.23    8.58
 Brazil Bovespa              62,599.07     0.24    3.94
 Mexico IPC                  49,420.52    -0.35    8.28
 Chile IPSA                   4,902.83     0.12   18.10
 Chile IGPA                  24,569.58     0.11   18.50
 Argentina MerVal            22,203.35    -1.07   31.24
 Colombia IGBC               10,780.98     0.44    6.45
 Venezuela IBC               82,593.67     5.71  160.50
 Currencies                     Latest    Daily     YTD
                                            pct     pct
                                         change  change
 Brazil real                    3.2822     0.13   -1.01
 Mexico peso                   18.2830     0.34   13.46
 Chile peso                     668.75    -0.04    0.29
 Colombia peso                2,891.83     0.25    3.79
 Peru sol                        3.266     0.03    4.53
 Argentina peso (interbank)    15.9950     0.06   -0.75
 Argentina peso (parallel)       16.26     0.49    3.44
 (Reporting by Bruno Federowski, editing by G Crosse)
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