January 9, 2019 / 2:59 PM / 2 months ago

EMERGING MARKETS-Latam forex, stocks boosted by U.S.-China trade deal prospects

    By Aaron Saldanha
    Jan 9 (Reuters) - Latin American stocks rose and currencies
firmed on Wednesday as increased prospects that the United
States and China could reach a trade deal improved investor
appetite for risk.
    Chinese and U.S. officials ended talks that had lasted
longer than expected on Wednesday amid signs of progress, with
officials saying details would be released soon.
    MSCI's index of Latin American stocks, which
had shed 9.3 percent during 2018 partly due to concerns about
trade, was up 1.4 percent on Wednesday. A significant amount of
Latin American resources are exported to China. 
    Morgan Stanley strategists said in a note that signs of
progress in U.S.-China trade talks should support emerging
markets. They said the release of minutes from the U.S. Federal
Reserve's December rate meeting - due later in the day - and
upcoming comments by Fed members would be key factors for the
dollar in the near term. 
    Brazil's Bovespa stocks benchmark tacked on 1.2
percent on gains clocked across the board. Resources stocks
accounted for most of the rise of the index, which hit a new
all-time high.
    Shares of miner Vale SA, the world's top iron ore
and nickel producer, were 2.6 percent higher.
    Brazilian energy stocks were boosted by a 2.6 percent rise
in oil prices. Common shares of state-run oil firm
Petroleo Brasileiro SA jumped 2.2 percent.
    In Brazil's bond market, the surplus yield investors receive
by holding local 10-year bonds as compared to U.S.
10-year bonds its lowest in about 11 and a half
years during the session - at 636.46 basis points.
    
   
    "Despite the rally in Brazilian assets, we see decent room
for longer-end rates to continue falling. However, positioning
has become less favourable," wrote Morgan Stanley's strategists.
    Mexico's peso firmed half a percent to trade at a
more than two-month peak.
    Chile's stocks rose 0.6 percent while its peso
 firmed as prices of copper - the country's top export -
hit one-week highs on signs of progress in the U.S.-China trade
talks.
    Colombia's peso shot up more than 1 percent to hit an
over two-month peak, before giving up some ground while
Argentina's peso also firmed.    
    
    Key Latin American stock indexes and currencies at 1419 GMT
    
 Stock indexes                           daily %
                             Latest       change
 MSCI Emerging Markets          990.72      1.56
                                        
 MSCI LatAm                    2805.99      1.37
                                        
 Brazil Bovespa               93111.05      1.17
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    5254.83      0.58
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                       -         -
                                        
                                                
 Currencies                              daily %
                                          change
                                Latest  
 Brazil real                    3.6929      0.59
                                        
 Mexico peso                   19.2632      0.49
                                        
 Chile peso                      677.9      0.31
                                        
 Colombia peso                 3127.63      0.68
 Peru sol                        3.335      0.15
                                        
 Argentina peso                37.5000      0.24
 (interbank)                            
                                        
 

    
 (Reporting by Aaron Saldanha in Bengaluru
Editing by Susan Thomas)
  
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