August 21, 2017 / 4:51 PM / a year ago

EMERGING MARKETS-LatAm markets seesaw ahead of Jackson Hole conference

    By Bruno Federowski
    SAO PAULO, Aug 21 (Reuters) - Latin American stocks and
currencies seesawed on Monday as traders awaited the U.S.
Federal Reserve's annual central banking symposium in Jackson
Hole later this week for clues on the U.S. central bank's plans
to raise interest rates.
    Questions over the possibility of a third U.S. rate hike
this year have been a key driver of demand for emerging market
currencies in recent weeks following a mixed batch of economic
    Fed Chair Janet Yellen is expected to shed further light on
the bank's plans to dial back the extraordinary stimulus
policies it introduced to fight the 2009 financial crisis, such
as unraveling the bonds it currently holds on its balance sheet.
    "A consensus among the Fed appears to have emerged to
announce the reduction the balance sheet in September to be
implemented beginning in the fourth quarter," analysts at Brown
Brothers Harriman wrote in a note to clients.
    "We do not anticipate that Yellen will contradict this
general view."
    Traders avoided making risky bets before her speech,
focusing on more local factors such as moves in prices of
commodities or political developments.
    The Chilean peso touched a six-month high as hopes
of stronger Chinese demand lifted futures of copper, a key
export, to the highest since 2014. Shares of Brazilian miner
Vale SA followed iron ore prices higher, lifting the
country's benchmark Bovespa stock index to a six-month
    The Mexican peso firmed 0.2 percent after the
United States, Canada and Mexico wrapped up their first round of
talks revamp the NAFTA trade pact, vowing to keep up a
blistering pace of negotiations.
    Traders are monitoring the trade talks closely as any U.S.
measures to shield local industry from foreign competition would
have a strong effect on Mexico.
    The three countries are trying to complete a full
modernization of the 23-year-old North American Free Trade
Agreement by early 2018, before Mexico's national election
campaign starts.
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                                 daily %   YTD %
                                                change  change
 MSCI Emerging Markets                1063.59     0.38   22.88
 MSCI LatAm                           2827.99     1.09   19.52
 Brazil Bovespa                      68950.01     0.34   14.48
 Mexico S&P/BVM IPC                  51203.98     0.25   12.18
 Chile IPSA                           5101.25    -0.29   22.88
 Chile IGPA                          25495.67    -0.19   22.96
 Argentina MerVal                    22967.35     1.07   35.76
 Colombia IGBC                       10932.09     0.61    7.94
 Venezuela IBC                      197792.14     1.52  523.85
 Currencies                                    daily %   YTD %
                                                change  change
 Brazil real                           3.1501    -0.16    3.15
 Mexico peso                          17.6600     0.20   17.46
 Chile peso                             642.6     0.57    4.37
 Colombia peso                        2986.67    -0.03    0.50
 Peru sol                               3.239     0.09    5.40
 Argentina peso (interbank)           17.2500     0.70   -7.97
 Argentina peso (parallel)              18.25     0.55   -7.84
 (Reporting by Bruno Federowski; Editing by Nick Zieminski)
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