EMERGING MARKETS-LatAm assets rally as G20 stokes risk appetite

* Brazil's Bovespa tops 65,000, Mexico's IPC above 30,000

* Mexico inflation slows but rates still expected to rise

* LatAm FX firmer, Mexico peso up after 4 losing sessions

By Walter Brandimarte

NEW YORK, Nov 9 (Reuters) - Latin American assets rallied
on Monday after the Group of 20 rich and developing countries
renewed their pledge to keep economic stimulus in place and
Moody's revised up the outlook for China's credit ratings.

The G20 weekend commitment to supportive fiscal and
monetary conditions encouraged investors to take on risk in
emerging markets, sending the MSCI Latin America stock index
more than 3 percent higher.

Comments from G20 finance ministers and central bankers
resonated with the U.S. Federal Reserve's pledge last week to
keep interest rates low for an "extended period."
[ID:nLQ516726]

"There are people starting to talk about the Fed not moving
until the beginning of 2011," said a currency trader in Mexico
City.

The optimism lifted Latin American currencies against a
weakening U.S. dollar -- including the Mexican peso, which had
declined about 2 percent last week on fears of credit rating
downgrades.

Investor sentiment was also supported by Moody's decision
to revise to positive the credit ratings of China.

The ratings agency praised the government's handling of the
economy during the financial crisis, saying an upgrade could
come if the recent boom in domestic lending is not followed by
a significant rise in non-performing loans. [ID:nPEK207785]

The idea of stable economic growth in China lifted the
price of commodities, helping U.S. crude oil prices rise $2 to
$79.43 a barrel.

Supported by shares of energy and mining companies, the
MSCI stock index for Latin America .MILA00000PUS jumped 3.36
percent.

The Brazilian Bovespa index .BVSP gained 2.71 percent to
66,214.34, above the psychological level of 65,000. The Mexican
IPC index .MXX rose 2.1 percent, piercing 30,000.

In Argentina, the MerVal .MERV ended 2.96 percent higher
while, in Colombia, the IGBC .IGBC climbed 1.58 percent.

In foreign exchange markets, the Mexican peso MXN= was
trading 1.25 percent higher at 13.267 per U.S. dollar after
four consecutive sessions of losses.

Earlier in the day, the Mexican central bank reported
October inflation slowed down to 4.5 percent, its lowest level
since March 2008. [ID:nN0946021]

Still, economists expect the Mexican central bank to raise
interest rates to counter the potential inflationary impact of
tax rises approved by Congress for 2010.

Other Latin American currencies also appreciated. The
Chilean peso CLP=CL strengthened 1.76 percent to to 512.70
per dollar while the Brazilian real BRBY gained 1.0 percent
to 1.702 per greenback.

Yield spreads between U.S. Treasuries and emerging market
bonds, a key gauge of risk aversion, tightened 11 basis points
to 306 basis points on the JP Morgan EMBI+ index 11EMJ.
(Additional reporting by Jean Luis Arce in Mexico City;
Editing by Kenneth Barry)