Bonds News

EMERGING MARKETS-Brazil's real falls, Bolsonaro tests positive for coronavirus

    * Brazilian President Bolsonaro tests positive for
    * Brazil's real erases earlier gains 
    * Chile's peso supported by strong export data
    * Mexican peso pressured by weak oil

 (Updates prices throughout)
    By Shreyashi Sanyal
    July 7 (Reuters) - Brazil's real erased gains from earlier
in the session on Tuesday, on caution about the alarming spread
of the coronavirus after the country's president, Jair
Bolsonaro, tested positive for the virus, while the Mexican peso
weakened with sliding oil prices.  
    The real, after having shed more than 25% for
the year on heightened political risks and soaring COVID-19
cases, came under pressure as Bolsonaro, long a skeptic about
the coronavirus, tested positive for it. 
    The pandemic has killed more than 65,000 people in Brazil,
which currently stands as the second-worst hit country in the
world by the pandemic after the United States, in terms of
    Regional currencies were also hurt by safe-haven flows into
the U.S. dollar.
    Mexico's peso fell 2% to the dollar, tracking
weakness in the crude market as rising cases cast doubts over
oil demand.
    Further clouding an economic recovery from COVID-19, a top
Mexican health official said the country's coronavirus pandemic
could last until next April.
    "After a hot start, risk is in retreat. We think the market
is largely in a waiting game over a multitude of issues related
to COVID-19 and politics. That will take time and at a minimum
suggests choppy price action for the foreseeable future,"
analysts at TD Securities wrote in a note. 
    Brazilian stocks fell 1.3%, coming off a four-month
high. Iron ore miner Vale SA was among the top drags
on the Bovespa, after it flagged a $400 million impairment
charge related to the planned sale of its long-troubled nickel
and cobalt operations on the Pacific island of New Caledonia.

    Latin American stocks have benefited more from recent
liquidity measures, in comparison with currencies, which have
been pressured by record-low borrowing rates and sustained
dollar demand.
    Chile's peso was propped up by data showing increased
copper exports in June, while total exports also rose from last
    A recent rally in copper prices has also helped the peso,
given that the red metal is Chile's largest export.
    Chilean stocks fell about 0.63% from a near
four-month high.
    Key Latin American stock indexes and currencies at 2008 GMT:
         Stock indexes                  Latest     Daily %
 MSCI Emerging Markets                   1051.31       -0.87
 MSCI LatAm                              1949.62       -2.34
 Brazil Bovespa                         97661.15       -1.29
 Mexico IPC                             37843.96       -0.11
 Chile IPSA                              4257.45       -0.63
 Argentina MerVal                       42588.46      -1.733
 Colombia COLCAP                         1131.84        0.21
            Currencies                  Latest     Daily %
 Brazil real                              5.3810        0.07
 Mexico peso                             22.8035       -2.09
 Chile peso                                789.7        1.16
 Colombia peso                           3624.61        0.31
 Peru sol                                 3.5368        0.20
 Argentina peso (interbank)              70.8700       -0.07
 Argentina peso (parallel)                   123        3.25

 (Reporting by Shreyashi Sanyal and Ambar Warrick in Bengaluru;
Editing by Sandra Maler and Jonathan Oatis)