February 7, 2019 / 2:49 PM / 2 months ago

EMERGING MARKETS-Latin American currencies subdued, Mexico rate meeting eyed

    By Agamoni Ghosh
    Feb 7 (Reuters) - Latin American currencies were subdued on
Thursday against a strong dollar but Mexico's peso steadied
ahead of the year's first monetary policy meeting and stocks in
Brazil recovered from their worst intra-day fall in eight months
in the previous session.
    The greenback rose to its highest level in two-weeks on
recent robust U.S. economic data, aided by the euro's
fall after the European Commission sharply cut its forecasts for
growth in the euro zone.
    "We think that the rally in EM fixed income will take a
pause and expect to see some near-term profit-taking by
investors," Morgan Stanley analysts said in a note.
    Mexico's peso recouped early losses ahead of
Banxico's first monetary policy decision of 2019. Officials are
expected to leave rates at 8.25 percent and signal a more dovish
tone to accommodate future rate cuts.
    "We believe that the tone of the statement could be less
hawkish than the previous one, more than what the market
anticipates," said Banorte analysts in a note. 
    Brazil's real slipped for the fifth consecutive
session a day after the central bank held interest rates at a
record low and signaled that muted inflationary pressures could
keep them there for some time.
    A number of emerging market central banks have cut rates or
stayed put after the U.S. Federal Reserve signaled a pause in
further monetary policy tightening, citing global growth
concerns. 
    Stocks in Sao Paulo, led by financials, recovered
after falling over 3 percent on Wednesday, their worst day in
more than eight months, after a spokesman said Brazilian
President Jair Bolsonaro will analyze proposals to reform the
country's costly pension system when his health allows it.
Bolsonaro is recovering from an operation and no date has been
set for him to leave the hospital.
    Banco Do Brasil rose 1.31 percent after falling
6.09 percent the previous day, and Itau Unibanco and
Bradesco  advanced 0.94 and 0.66 percent,
respectively.
    Shares of BRF Foods, which fell short of raising
5 billion reais at the end of an asset sale program, fell 
almost 5 percent.
    Chile's IPSA index rose marginally due to Latam
Airlines, while the peso slipped further from
six-month highs hit earlier in the week. 

    Key Latin American stock indexes and currencies at 1400 GMT
    
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1045.05     -0.33
                                          
 MSCI LatAm                      2871.22      0.12
                                          
 Brazil Bovespa                 95160.67      0.55
                                          
 Mexico IPC                            -         -
                                          
 Chile IPSA                      5432.01       0.1
                                          
 Argentina MerVal                      -         -
                                          
 Colombia IGBC                         -         -
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7175     -0.36
                                          
 Mexico peso                     19.0927      0.16
                                          
 Chile peso                       653.65      0.07
                                          
 Colombia peso                         -         -
 Peru sol                              -         -
                                          
 Argentina peso (interbank)            -         -
                                          
 

 (Reporting by Agamoni Ghosh)
  
Nuestros Estándares:Los principios Thomson Reuters
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