April 8, 2016 / 4:31 PM / 2 years ago

EMERGING MARKETS-Oil rise lifts Latam currencies; eyes on Peru, Brazil

By Bruno Federowski
    SAO PAULO, April 8 (Reuters) - A jump in oil prices put
Latin American currencies on track for a positive end to a week
marked by hefty losses as investors turned their focus to
political developments in Peru and Brazil over the coming days.
    Hopes that major oil producers could agree to freeze output
at a meeting in Doha on April 17 lifted crude prices by more
than 6 percent, triggering a rebound in demand for risky assets.
    Latin American markets had been slammed over the last few
days by growing worries over global economic weakness, but
concerns eased after Federal Reserve Chair Janet Yellen
expressed confidence in the U.S. economic outlook. 
    The Peruvian sol strengthened on Friday after
weakening for five consecutive days, but still eyed its biggest
weekly loss since late January.
    Peru holds general elections on Sunday, with the most
plausible outcome of the presidential race seeming to be a
face-off between front-runner Keiko Fujimori and either leftist
Veronika Mendoza or investor-favorite Pedro Pablo Kuczynski in a
second-round vote. 
    Uncertainty over the next government's economic policies
limited gains in Peru's currency, offering a sharp contrast with
the cheerier mood prevailing in Brazilian markets.
    A parliamentary commission assessing the legality of
impeachment proceedings against leftist President Dilma Rousseff
will take a stand on Monday, paving the way for a vote in the
full chamber of deputies over the following days.
    Polls showing growing support for Rousseff's ouster among
lawmakers helped lift the country's stocks and currency
, as many traders believe the move could bring foreign
capital back to Brazil's recession-weary economy.
    Analysts with Eurasia Group estimated a 60 percent chance
that Rousseff would be impeached this month. 
    Shares of Rumo Logistica Operadora Multimodal SA 
jumped 15 percent after the Brazilian logistics operator
successfully completed a capital increase of 2.6 billion reais
($717 million). The transaction allayed some concerns about
near-term debt sustainability, analysts said. 
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               816.94     0.95    1.91
 MSCI LatAm                         2099.23      3.2   11.16
 Brazil Bovespa                    50261.76      3.6   15.94
 Mexico IPC                        45200.19     0.33    5.17
 Chile IPSA                         3928.76     0.99    6.75
 Chile IGPA                        19255.65     0.85    6.08
 Argentina MerVal                  12089.81      1.9    3.55
 Colombia IGBC                      9806.20     0.86   14.73
 Venezuela IBC                     15179.96     -1.7    4.06
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.6329     1.66    8.65
 Mexico peso                        17.7635     0.65   -3.00
 Chile peso                           682.6     0.06    3.97
 Colombia peso                      3082.95     0.73    2.80
 Peru sol                            3.3821     0.35    0.94
 Argentina peso (interbank)         14.4250     0.31  -10.00
 Argentina peso (parallel)            14.84     0.74   -3.84

 (Reporting by Bruno Federowski; Additional reporting by Paula
Arend Laier; Editing by Paul Simao)
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