* Brazil's Bovespa up for 6th session, hits 22-month high
* Mexico stocks, peso gain on bets of US-driven rebound
* Argentine assets rally on debt swap expectations
* Chile's cenbank minutes hint at rate hike after quake
By Walter Brandimarte
NEW YORK, April 5 Further signs of recovery in the U.S. economy propelled Latin American financial markets on Monday, sending Mexican stocks to an all-time high and the country's currency to its strongest in 17 months.
Latin American markets returned from a long Easter weekend cheered by a batch of positive economic data, including Friday's rise in U.S. nonfarm payrolls, as well as Monday's surprisingly strong data on the U.S. non-manufacturing service and home sales.
In Mexico, which sends 80 percent of its exports to the neighboring United States, the IMEF manufacturing sector index jumped to its highest level in almost 3-1/2 years. For details, see [ID:nN05220746].
"Market participants realize the economic performance of Mexico in 2010 will be tremendous after the 'perfect storm' occurred in 2009," said Kathryn Rooney Vera, senior strategist at Bulltick Capital Markets, forecasting the peso will gain an additional 6.4 percent through the end of the year.
The Mexican peso MXX= led Latin American currencies higher, gaining 0.58 percent to 12.237 per U.S. dollar. Bulltick sees it at 11.5 per greenback by year end.
Chile's peso came next, boosted by central bank minutes that hinted interest rates could go higher soon in order to fight inflation resulting from a massive earthquake in February. [ID:nN05168428]
Rising copper prices also supported the Chilean currency CLP=, which firmed 0.54 percent to close at 519.30 per dollar, the strongest in two weeks. Copper is Chile's main export product.
The Brazilian real BRBY gained 0.34 percent to 1.763 per dollar, in its fifth consecutive session of gains.
STOCKS AT NEW HIGHS
Bets that Mexico will be the Latin American country to benefit the most from the U.S. economic recovery sent the country's IPC stock index .MXX closed up 1.15 percent to a record high 33,648.89 points.
Argentina's MerVal stock index .MERV also finished at an all-time high, after jumping 3.19 percent on the day on expectations the government will get a high rate of acceptance in a planned swap of defaulted bonds.
Brazil's Bovespa index .BVSP rose 0.22 percent to a fresh 22-month high, in its sixth consecutive session of gains.
"The U.S. data is underscoring positive expectations for the Brazilian economy," said Fernando Barbara, a fixed-income director at Capital Investimentos in Sao Paulo.
Brazil's domestic yield curve, as measured by future interest rate contracts, flattened slightly in the first trading session after Henrique Meirelles said he will remain as central bank president until the end of his mandate. The news ended speculation on whether he would run for public office.
Meirelles' decision increased bets the central bank will soon raise interest rates to contain prices, reducing risks of higher inflation in the future, traders said.
Brazil's interest rate contracts maturing January 2012 fell to 1.62 percent 2DIJF2, compared to 11.66 percent in the previous session, while shorter maturities remained practically unchanged. (Additional reporting by Paula Laier and Aluisio Alves in Sao Paulo; Editing by Andrew Hay)