August 2, 2017 / 4:51 PM / a year ago

EMERGING MARKETS-Brazil stocks, currency up on rising reform hopes

    By Bruno Federowski
    SAO PAULO, Aug 2 (Reuters) - Brazil's stocks and currency
rose on Wednesday after lawmakers hinted they would clear
President Michel Temer from corruption charges, suggesting
resilient support for his reform platform.
    Members of Brazil's lower house of Congress voted to end
discussions on a motion that would send Temer to the country's
top court for trial with an overwhelming 292-vote majority and
only 20 votes against.
    The vote was seen as a strong show of lawmaker support for
Temer, whose agenda of structural reforms, including a key
revamp of Brazil's pension system, is seen as critical to
boosting long-term growth.
    A final vote on the matter is expected later on Wednesday.
    "Markets had already priced that Temer would be cleared, but
it looks like it's going to be fast and support for him will be
strong. That is good news for reforms," BGC Liquidez trader
Francisco Carvalho said.
    However, traders said there may be more turbulence to come
as the prosecutor-general's office is expected to file
additional charges against Temer in coming months. 
    The Brazilian real firmed 0.2 percent in early
afternoon trading after slipping as much as 0.4 percent earlier
in the day.
    The country's benchmark Bovespa stock index rose 0.9
percent, surpassing the 67,000 threshold for the first time
since mid-May. Shares of state-controlled oil company Petróleo
Brasileiro SA added the most points to the index.
    Other Latin American currencies also strengthened as doubts
grew over a potential U.S. interest rate increase later this
year following weaker-than-expected jobs data. The Mexican peso
 firmed 0.3 percent, while the Colombian peso was
up 0.2 percent. 
     U.S. private employers added 178,000 jobs in July, below
economists' expectations, the latest in a batch of mixed reports
that have made traders skeptical about the Federal Reserve's
rate-hike plans.
    St. Louis Federal Reserve President James Bullard said he is
opposed to further U.S. rate increases by the central bank and
warned that more hikes could hinder achievement of the Fed's 2
percent domestic inflation goal, Market News International
reported on Wednesday.
    Key Latin American stock indexes and currencies at 1630 GMT:
 Stock indexes                               daily %    YTD %
                                    Latest    change   change
 MSCI Emerging Markets              1069.99     0.09    23.98
 MSCI LatAm                         2789.36     0.29    18.82
 Brazil Bovespa                    67111.68      0.9    11.43
 Mexico S&P/BVM IPC                51236.36     0.08    12.25
 Chile IPSA                         5082.60      0.1    22.43
 Chile IGPA                        25381.28     0.09    22.41
 Argentina MerVal                  21687.06     0.77    28.19
 Colombia IGBC                     10942.48     0.01     8.04
 Venezuela IBC                    146877.84     3.77   363.26
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.1190     0.18     4.17
 Mexico peso                        17.8340     0.29    16.32
 Chile peso                          651.82     0.26     2.90
 Colombia peso                      2961.22     0.10     1.36
 Peru sol                             3.241    -0.03     5.34
 Argentina peso (interbank)         17.5400     0.26    -9.49
 Argentina peso (parallel)            18.12    -0.17    -7.17

 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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