October 6, 2016 / 3:42 PM / 2 years ago

EMERGING MARKETS-Latam currencies, stocks mostly down ahead of U.S. payrolls report

By Bruno Federowski
    SAO PAULO, Oct 6 (Reuters) - Latin American currencies and
stocks mostly fell on Thursday as traders bet a closely watched
U.S. employment report due on Friday will strengthen the case
for an interest rate increase this year.
    Strong U.S. economic data has boosted expectations that the
U.S. Federal Reserve will soon act on rates, denting demand for
higher-yielding emerging market currencies.
    A report showed on Thursday the number of Americans filing
new claims for unemployment benefits unexpectedly fell last week
to near a 43-year low. 
    That reading comes a day before the government's September
employment figures, a strong indicator of U.S. labor market
strength. Economists polled by Reuters estimate a 175,000
increase in non-farm payrolls.
    The Chilean peso slipped 0.4 percent, while the
Mexican peso weakened 0.2 percent.
    The mood was somewhat less bearish in stock markets, as a
stronger U.S. economy could translate into demand for exports
from emerging markets.
    MSCI's emerging benchmark hit a one-week high,
following developed bourses higher and lifted by gains across
Asia , Turkey and parts of central and
eastern Europe.
    Brazil's benchmark Bovespa stock index slipped but
losses were limited by a rise in shares of state-controlled oil
company Petróleo Brasileiro SA  and
planemaker Embraer SA.  
    The move came as lawmakers debated a constitutional
amendment that would impose a ceiling on the growth of public
    Analysts with political risk consultancy Eurasia Group said
they expect Congress to swiftly approve the amendment, which
traders see as crucial to regaining investor trust in Brazil.
    The proposal "contains only modest concessions to lawmakers
focused on preserving social spending," they wrote in a report.
    Key Latin American stock indexes and currencies at 1520 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               914.80    -0.05   15.25
 MSCI LatAm                         2430.11    -0.32   33.24
 Brazil Bovespa                    60087.65    -0.28   38.61
 Mexico IPC                        47891.00    -0.52   11.43
 Chile IPSA                         4077.12     -0.2   10.78
 Chile IGPA                        20324.10    -0.15   11.97
 Argentina MerVal                  17052.74     -0.1   46.06
 Colombia IGBC                      9911.29      0.1   15.96
 Venezuela IBC                     13335.23    -1.46   -8.59
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.2345    -0.51   22.03
 Mexico peso                        19.2600    -0.23  -10.54
 Chile peso                           667.7    -0.43    6.29
 Colombia peso                       2931.6    -0.05    8.11
 Peru sol                             3.411    -0.29    0.09
 Argentina peso (interbank)         15.2500    -0.36  -14.87
 Argentina peso (parallel)            15.59     0.06   -8.47

 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli
and Steve Orlofsky)
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