Bonds News

EMERGING MARKETS-Latam FX steadies after selloff; Oil-linked currencies slide

    * Brazil's real reverses declines from earlier in session
    * Mexican, Colombian pesos fall on tumbling oil prices 
    * Argentina raises reverse repo rates, keeps

 (Updates prices throughout; Adds bullets)
    By Shreyashi Sanyal
    Oct 29 (Reuters) - Most major Latin American currencies
steadied on Thursday after a sharp selloff in the previous
session, while currencies of oil-exporters including Mexico and
Colombia extended declines on tumbling crude prices. 
    Brazil's real edged 0.1% higher, a day after
the country's central bank kept its key interest rate at a
record-low 2.00%, maintaining its "forward guidance" pledge to
keep rates lower for longer and even the possibility of further
easing, despite the recent rise in inflation and fiscal risks.

    "The tone of the accompanying statement was a bit less
dovish than the previous one," said William Jackson, chief
emerging markets economist at Capital Economics. 
    "Yesterday's statement also put more emphasis on the risk of
looser fiscal policy as an asymmetric (upside) risk to the
inflation outlook."
    In an analysis by Reuters, a Biden victory in next week's
election could put the environment and human rights at the top
of the country's agenda with Brazil, complicating relations with
Brazilian President Jair Bolsonaro and jeopardizing trade,
    The mood was still subdued after the dollar extended
gains as worries remained about Europe's second wave of
coronavirus infections and traders were pricing in the
possibility of Democratic candidate Joe Biden winning the U.S.
election on Nov. 3. 
    Mexico's peso fell 0.6%, while the Colombian peso
 dropped 0.2% with oil prices 4% lower. Mexico's
currency has fared somewhat better than other Latin American
units due to the country's close trade ties with the United
States and analysts say a Biden win would be the most favorable
outcome for the Mexican peso. 
    Investors awaited a central bank policy decision in Colombia
on Friday, with expectations the bank will hold interest rates
    A Reuters poll showed expectations for Colombia's 2020
inflation rose versus last month as economic conditions began to
normalize, although estimates remain far below the central
bank's target. 
    The Chilean peso firmed 0.1% even as prices of its
main export, copper, slipped on Thursday. Market participants
watched as the country embarked on its path to reframe its
constitution this week. 
    Argentina's central bank raised its reverse repo rates while
holding the benchmark Leliq rate unchanged, a market filing from
the bank, seen by Reuters and confirmed by a bank official,
    The country's economy is expected to contract 12% this year,
with dwindling foreign reserves and capital controls creating a
wide gap between the official peso rate and trades in
alternative markets.

    Key Latin American stock indexes and currencies at 1852 GMT:
           Stock indexes                    Latest   Daily %
 MSCI Emerging Markets                      1120.97     0.02
 MSCI LatAm                                 1836.25     -0.1
 Brazil Bovespa                            96399.86     1.08
 Mexico IPC                                36904.50    -1.31
 Chile IPSA                                 3579.41    -1.38
 Argentina MerVal                          44142.27      1.4
 Colombia COLCAP                            1132.93     1.12
               Currencies                   Latest   Daily %
 Brazil real                                 5.7600     0.03
 Mexico peso                                21.3549    -0.35
 Chile peso                                   772.6     0.05
 Colombia peso                              3859.75    -0.81
 Peru sol                                    3.6108     0.02
 Argentina peso (interbank)                 78.2900     0.03
 Argentina peso (parallel)                      171     4.09
 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Nick Zieminski, Kirsten Donovan)