November 19, 2018 / 1:31 PM / a month ago

EMERGING MARKETS-Brazil stocks, real weaken; Mexican peso leads losses

    Nov 19 (Reuters) - The currencies of Brazil and Mexico
weakened on Monday despite the dollar dropping to two-month
lows, as concerns of a slowdown in global growth and simmering
U.S.-Chinese trade tensions clouded sentiment.
    The U.S. Federal Reserve policymakers signaled rate
increases ahead but also sounded more concerned about a
potential global slowdown, leading markets to suspect the
central bank's tightening cycle may not have much further to
run.
    This sent U.S. Treasury yields and the dollar lower.
    Weakness in regional market came also as the United States
kept up its tough rhetoric against China on the trade front, as
U.S. Vice President Mike Pence said there would be no end to
tariffs on $250 billion of Chinese goods until China changed its
ways.
    The Mexican peso led declines among regional
currencies, weakening 0.6 percent after a gain of 1.7 percent
over three sessions on rate hike optimism. 
    Bank Mexico raised rates to tame inflation and warned the
incoming government that any more market denting policy moves
may fan further rise in inflation.
    Brazil's real fell half a percent and stocks
in Sao Paulo declined, after strong gains the previous session.
On Friday, Brazilian investors cheered the choice of economist
Roberto Campos Neto by President-elect Jair Bolsonaro to head
the country's central bank.   
    The Bovespa stock index shed nearly 1 percent with losses
being broad based. Payment processor Cielo was the
worst performer, down nearly 4 percent, after negative research
action from HSBC and Credit Suisse. Credit Suisse downgraded the
 stock on weak profit expectations for 2019. 
    State oil company Petrobras fell 0.2 percent.
Economist Roberto Castello Branco agreed to be its chief
executive. 
    The incoming Bolsonaro administration has said it will
overhaul top management of the company, which has been embroiled
in a corruption scandal.  
    The Chilean peso fell after data showed that the
country's economy grew at the slowest pace this year amid a
slowdown in the mining sector.
    Financial markets in Argentina and stock markets in Mexico
were closed for local holidays. 
    
    Key Latin American stock indexes and currencies at 1303 GMT:
 
 Stock indexes                             daily %       YTD %
                                Latest      change      change
 MSCI Emerging Markets           990.04       0.38      -14.86
                                                    
 MSCI LatAm                     2651.07      -0.59       -5.71
                                                    
 Brazil Bovespa                87736.36      -0.88       14.84
                                                    
 Chile IPSA                     5198.37       0.14        0.14
                                                    
 Colombia IGBC                        -          -           -
                                                    
                                                              
 Currencies                                daily %       YTD %
                                            change      change
                                 Latest             
 Brazil real                     3.7533      -0.41      -11.72
                                                    
 Mexico peso                    20.2319      -0.45       -2.63
                                                    
 Chile peso                       671.7      -0.16       -8.49
                                                    
 Colombia peso                  3169.75      -0.12       -5.92
 Peru sol                         3.374       0.00       -4.06
                                                    
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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