October 16, 2019 / 8:49 PM / a month ago

EMERGING MARKETS-Latam markets aided by soft dollar, Argentine peso down on inflation data

 (Updates market prices)
    By Sruthi Shankar
    Oct 16 (Reuters) - The Brazilian real bounced off two-week
lows on Thursday and the Mexican peso rose against the dollar on
weak U.S. data, but Latin American markets were range-bound with
fresh strains in U.S.-China trade talks.
    The real rose 0.6% after a recent run of losses
fueled by sluggish data in the region's largest economy.
    The Mexican peso hit a fresh two-month high as the
dollar fell after U.S. retail sales data painted a gloomy
economic picture and supported the case for further interest
rate cuts by the Federal Reserve.
    Other currencies such as the Colombian and Chilean
 pesos weakened on concerns about trade disputes and
global growth.
    The U.S. House of Representatives on Tuesday passed four
pieces of legislation taking a hard line on China, with three
related to pro-democracy protests in Hong Kong.
    The measures came as Washington engaged in delicate talks
with Beijing over their bruising trade war. U.S. President
Donald Trump on Wednesday said he likely would not sign any
trade deal with China until he meets with Chinese President Xi
Jinping at the upcoming APEC Forum in Chile.
    "News flow on trade and events remains a source of
choppiness in a market where the macro backdrop is weak, but
policy backstop continues to keep asset valuations at elevated
levels," Oxford Economics analysts wrote in a note.
    "Even in the absence of a major sell-off, the underlying
performance variation shows low confidence in growth."
    The Argentine peso fell over 2% after data showed
consumer prices rose 5.9% in September, its sharpest jump in a
year, amid a flaring economic crisis in Latin America's No. 3
economy.
    However, stock markets in the region broadly rose, with
Brazil's Bovespa jumping 0.8%.
    Shares in state-run power firm Eletrobras gained
5% after it said that laying off third-party employees at its
unit Furnas Centrais Eletricas will generate cost savings of
about 280 million reais per year.
    Shares of Vale fell 2.5% as Dalian iron ore
futures slumped after China's top steelmaking city of Tangshan
issued a second-level smog alert that requires mills to further
limit operations.           
    Mexico's IPC index advanced, led by a 3.3% rise in
shares of America Movil after the country's largest
telecom provider said it was open to discussing a deal with Oi
SA, amid speculation that the Brazilian telecom
carrier is in talks to sell its assets.
    The Colombian peso slipped 0.2%, while its main stock
index was flat. Analysts awaited a ruling this week by
Colombia's constitutional court on the legality of a financing
law that was approved late year.
    "While our base case does not incorporate a dissolution of
the law, such a measure would be a net negative for local
assets, in our view," Morgan Stanley analysts said.
       
    Key Latin American stock indexes and currencies at 1953 GMT:
    
        Stock indexes                  Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1024.99        0.56
 MSCI LatAm                               2715.68        0.54
 Brazil Bovespa                         105376.36        0.85
 Mexico IPC                              43467.47        0.52
 Chile IPSA                               5150.11       -0.14
 Argentina MerVal                        30857.66      -1.519
 Colombia IGBC                           12867.39        0.07
                                                             
           Currencies                  Latest       Daily %
                                                     change
 Brazil real                               4.1535        0.64
 Mexico peso                              19.2092        0.16
 Chile peso                                716.55       -0.22
 Colombia peso                             3456.5       -0.19
 Peru sol                                   3.362        0.12
 Argentina peso                             56.00       -2.33
 
 (Reporting by Sruthi Shankar and Susan Mathew in Bengaluru;
Editing by Richard Chang)
  
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