EMERGING MARKETS-Latam markets trim losses on strong U.S. jobs data

Fri Mar 7, 2014 9:24am EST

By Walter Brandimarte
    RIO DE JANEIRO, March 7 (Reuters) - Latin American stocks
and currencies trimmed losses on Friday, with the Mexican peso
swinging into positive territory, after data showed the United
States created more jobs in February than forecast, easing fears
of a slowdown in the world's largest economy.
    Benchmark stock indexes for the region, including Brazil's
Bovespa index and Chile's IPSA, erased all of
their losses and traded slightly higher after the U.S. Labor
Department said employers added 175,000 jobs to their payrolls
last month. 
    Economists polled by Reuters had expected 149,000 new jobs.
    While the stronger-than-expected number was a relief to 
investors, who feared a U.S. economic slowdown would weigh on
global growth prospects, it also reinforced expectations that
the Federal Reserve will continue to wind down the monetary
stimulus that for years has supported appetite for risk in
emerging markets.
    The data "should be good news for consumer spending and
confidence and help cement expectations for ongoing Fed asset
purchase tapering," ING economist James Knightley wrote in a
research note.
    Latin American currencies, which are sensitive to potential
dollar outflows induced by the Fed's tapering, traded mostly
down after the payroll numbers, although they immediately
trimmed some of their early losses after the data.
    Brazil's real dropped 0.8 percent while Chile's peso
 weakened 0.4 percent. Also weighing on the Chilean
currency was a 2.7 percent drop in the price of copper,
the country's main export.
    The exception was Mexico's peso, which gained 0.1
percent to 13.1355 per dollar. Earlier on Friday, the peso rose 
to as much as 13.1042, its strongest intraday level since Jan.
15.
    Mexico is likely to benefit the most from a strong economy
in the United States, the main consumer market for Mexican
exports.
    
    Key Latin American stock indexes and currencies at 1402 GMT:
    
     Stock indexes                    daily %     YTD %
                      Latest          change      change
 MSCI Emerging        970.7           0.04        -3.23
 Markets                                          
 MSCI LatAm           2968.63         -0.67       -6.63
                                                  
 Brazil Bovespa       47217.22        0.26        -8.33
                                                  
 Chile IPSA           3737.05         0.18        1.02
                                                  
 Chile IGPA           18426.51        0.15        1.09
                                                  
                                                  
 Currencies                           daily %     YTD %
                            Latest    change      change
 Brazil real          2.3384          -0.79       0.79
                                                  
 Mexico peso          13.1475         0.04        -0.89
                                                  
 Chile peso           560.8           -0.41       -6.19
                                                  
 Colombia peso        2036.19         -0.38       -5.12
                                                  
 Peru sol             2.802           -0.07       -0.32
                                                  
 
    
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    GRAPHIC on emerging market FX performance 2014:GRAPHIC on MSCI emerging index performance 2014:-------------------------------------------------------------->