(Refiles to fix typo in reporting credits)
MEXICO CITY, March 21 Yields on Mexican interest
rate swaps fell on Friday after the country's central bank
dialed back a hint it could raise borrowing costs, while rate
futures in Brazil dipped after inflation data met expectations.
Mexico's central bank held steady its benchmark interest
rate, pointing to slack in the economy while noting that a
recent spike in inflation had eased and was unlikely to spur
wider price pressures.
Policymakers removed language suggesting they could hike if
a recent spike in consumer prices had hit inflation
expectations. The central bank instead highlighted weakness in
the economy that should keep inflation pressures at bay.
Yields on interest rate swaps fell after the
announcement as investors trimmed bets on a hike later this
year. Most economists expect Mexico's central bank
to hold borrowing costs steady until the first quarter of 2015.
Yields on Brazilian interest rate futures <0#2DIJ:> dropped
across the board after mid-month inflation numbers came in line
with expectations in a Reuters poll.
"It's a correction, because people were pricing in a higher
number," said Newton Rosa, an economist with SulAmerica
Investimentos in Sao Paulo.
Most Latin American currencies rose with investors more
willing to take on riskier assets, according to Pedro Tuesta, an
economist with research firm 4Cast.
Brazil's real gained for the third session in four,
edging to its highest level against the dollar in two weeks.
The Colombian peso dipped slightly following a
five-day rally that saw the currency gain about 2.7 percent
against the dollar. Recent gains in the peso have been driven by
better-than-expected fourth-quarter economic growth data and an
announcement by JPMorgan on Wednesday that it will boost the
weighting of Colombia's peso-denominated debt in two closely
followed emerging market bond indexes.
Colombia's central bank on Friday held its benchmark lending
rate unchanged for a 12th straight month, as expected, as it
seeks to maintain monetary stimulus while inflation remains
Local stocks mostly gained, with the MSCI Latin American
stock index rallying for the fifth straight
session to close at a nearly two-month high.
Mexico's IPC index rose to its highest level in
nearly five weeks as stocks capped their best week since late
June 2013, rising about 5.5 percent in the last five sessions.
Bargain hunters swept into the Mexican stock market this
week after the index closed at its lowest since last June last
Latin American stock indexes and currencies at 2240 GMT:
Stock indexes daily YTD %
MSCI LatAm 2,988.81 0.72 -6.62
Brazil Bovespa 47,380.94 0.22 -8.01
Mexico IPC 40,021.73 1.02 -6.33
Chile IPSA 3,633.20 -0.62 -1.78
Chile IGPA 18,049.07 -0.24 -0.98
Argentina MerVal 6,086.82 2.04 12.91
Colombia IGBC 13,134.57 0.11 0.48
Peru IGRA 14,407.32 -0.32 -8.55
Venezuela IBC 2,334.31 -6.2 -14.70
Currencies daily YTD %
Brazil real 2.3237 0.02 1.42
Mexico peso 13.2375 0.17 -1.57
Chile peso 562.0000 0.71 -6.39
Colombia peso 1995.0000 -0.09 -3.16
Peru sol 2.8090 0.21 -0.57
Argentina peso (interbank) 7.9725 -0.09 -18.56
Argentina peso (parallel) 10.9000 0.46 -8.26
(Reporting by Michael O'Boyle in Mexico City, and Asher Levine,
Bruno Federowski and Priscila Jordao in Sao Paulo; Editing by
Chris Reese and Lisa Shumaker)