February 19, 2019 / 2:54 PM / 7 months ago

EMERGING MARKETS-Latam currencies rise ahead of trade talks; Brazil stocks recover

    By Agamoni Ghosh
    Feb 19 (Reuters) - Latin American currencies strengthened on
Tuesday amid increased  risk appetite for assets in the region
as the dollar softened with investors tracking the next round of
trade talks between the United States and China.
    A new round of talks between the United States and China to
resolve their trade war will take place in Washington on
Tuesday, with follow-up sessions at a higher level later in the
week, the White House said.
    Although very little is known about details of the talks,
news of progress between the world's largest economies have
kindled hopes among investors that the two countries can reach a
compromise by a March 1 deadline for resuming tariffs.
    Global equities showed a subdued trend on the day with Asian
indices barely holding ahead of the fresh Sino-U.S.trade talks
and European stocks slumping on news of possible U.S. tariffs
for the auto sector coming to Europe.
    MSCI's index for Latin American currencies
rose 0.3 percent matching the moves of Brazil's real and
Mexico's peso as oil prices hovered around 2019 highs
supported by OPEC-led supply cuts.
    "It seems to be just general risk appetite improving in the
region with higher oil prices helping," said Edward Glossop,
emerging markets economist at Capital Economics.
    Stocks in Brazil managed to buck the global trend
and shed losses from the previous session when the main index
slipped over 1 percent as investment sentiment soured on
uncertainty fed by a brewing political scandal. 
    Brazilian President Jair Bolsonaro fired Secretary General
Gustavo Bebianno due to accusations of misusing campaign funds
for congressional candidates in last year's election.

    Bebianno's departure cast doubt over the young government's
ability to pass crucial pension reforms on time. The draft of
the proposed reform is expected to be tabled in the Congress
this week. 
     The Chilean peso was marginally lower, dragged down
by a decline in the price of copper, the country's main export,
while stocks on the IPSA index shed 0.1 percent. 
    
    Key Latin American stock indexes and currencies at 1420 GMT

 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1034.22     -0.24
                                          
 MSCI LatAm                      2877.06      0.83
                                          
 Brazil Bovespa                 97296.48      0.82
                                          
 Mexico IPC                            -         -
                                          
 Chile IPSA                      5366.75     -0.07
                                          
 Argentina MerVal                      -         -
                                          
 Colombia IGBC                         -         -
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7226      0.30
                                          
 Mexico peso                     19.2093      0.25
                                          
 Chile peso                        659.9     -0.08
                                          
 Colombia peso                         -         -
 Peru sol                              -         -
                                          
 Argentina peso (interbank)            -         -
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Andrea
Ricci)
  
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