April 22, 2019 / 9:23 PM / 3 months ago

EMERGING MARKETS-Latam FX weaker; Brazil stocks cut losses on pension progress

 (Recasts throughout, updates prices)
    By Susan Mathew
    April 22 (Reuters) - Latin American currencies weakened in
quiet trade on Monday, and most while most regional stock
indexes tracked Wall Street lower, pension reform optimism
helped Brazil stocks retrace earlier losses to end flat.
    Following a three-day holiday weekend, Mexico's peso
lost 0.3 percent, while the Colombian peso gave up narrow
gains from earlier in the session amid surging oil prices.
    Analysts at Banco Base said in a note that market
participants are expected to remain cautious as they await
first-quarter U.S. economic data due later this week to gauge
global growth momentum.
    Brazil's real also turned lower against the dollar,
with a closely watched survey showing that economists continue
to slash economic growth forecasts for Brazil this year, a day
ahead of a key congressional vote on pension reforms.

    But stocks in Sao Paulo rebounded from session
losses of up to 0.9 percent and closed flat after Labor and
Pensions Secretary Rogerio Marinho said there will be some
"minor changes" to the pension bill, but insisted the government
will not dilute its targeted savings of 1.1 trillion reais ($280
billion) over the next decade.
    "An agreement tends to facilitate approval of the matter in
the congressional committee by a large majority, which
demonstrates an improvement in the government's capacity for
political articulation," said Alexandre Soares, a trader at BGC
Liquidez.
    An overhaul of Brazil's bloated pension system is considered
crucial to narrowing the country's fiscal deficit. 
    Argentina's currency weakened over 1 percent, while
stocks toppled nearly 4 percent, touching their lowest level
since the first trading day of the year.
    Argentina posted a surplus in the first quarter, but ran a
primary fiscal deficit of 13.037 billion pesos ($305.32 million)
in March. Under a $56.3 billion financing deal with the
International Monetary Fund, the government has agreed to wipe
out the primary fiscal deficit this year.
    Gustavo Ber, an economist at consultancy Estudio Ber, also
pointed to some negative market response from measures announced
last week aimed at reining in inflation and halting the
currency's decline.
    The measures were "interpreted as electoral and transitory,
by not addressing the causes of inflation and imbalances," he
said. The country heads into general elections in October.
    Chilean stocks also fell, but Colombian shares
 rose with higher oil prices aiding a 2 percent rise in
state-oil firm Ecopetrol.
    
    
 Key Latin American stock indexes and currencies at 2100 GMT:
       Stock indexes           Latest      Daily
                                            pct
                                           change
 MSCI Emerging Markets          1,089.03     -0.32
                                          
 MSCI LatAm                     2,759.50      0.13
 Brazil Bovespa                94,588.06      0.01
 Mexico IPC                    45,381.22     -0.32
 Chile IPSA                     5,234.30     -0.52
 Argentina MerVal              30,786.64      -3.9
 Colombia IGBC                 12,981.60       1.4
                                                  
         Currencies            Latest      Daily
                                            pct
                                           change
 Brazil real                      3.9356     -0.09
 Mexico peso                     18.8268     -0.36
 Chile peso                        663.9     -0.30
 Colombia peso                  3,153.88     -0.24
 Peru sol                          3.304     -0.21
 Argentina peso (interbank)      42.5000     -1.41
                                          
 
 (Reporting by Susan Mathew in Bengaluru, Paula Arend Laier in
Sao Paulo and Walter Bianchi in Beunos Aires; editing by G
Crosse)
  
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