Bonds News

CORRECTED-EMERGING MARKETS-Latam FX firms as Fed's mega boost dents dollar; stocks rally

 (Removes reference to Argentine stocks and peso in the table as
the country's markets are closed for a holiday)
    By Susan Mathew
    March 24 (Reuters) - Latin American currencies firmed on
Tuesday, joining broader emerging market peers as the dollar
slipped after the U.S. Federal Reserve announced extraordinary
stimulus that eased worries about funding bottlenecks. 
    Stocks also found footing as Wall Street indexes jumped on
signs the U.S. Senate is nearing a deal on a $2 trillion
economic rescue package. Brazil shares surged 9%,
while Chile stocks jumped almost 5%. Breaking a
five-day losing streak, Mexican equities rose 3.5%.

    The Fed on Monday said not only will it buy unlimited
amounts of assets but also expand its mandate to corporate and
municipal bonds and backstop a series of other measures that
analysts estimate will deliver $4 trillion-plus in loans to
non-financial firms.
    That dented the dollar, helping Mexico's peso jump as
much as 3% in what could be its best day in more than 9 months.
Brazil's real rose 1.4%, while the Chilean peso
firmed 2%, on course for its biggest one-day gain in four
    The Fed's move was its latest in a series of measures
unveiled recently to support the economy and calm markets as the
coronavirus pandemic threatens to bring global economic activity
to a grinding halt. 
    Surveys showed that business activity across the globe
collapsed at a record pace in March. The virus continues to
spread at an alarming rate, intensifying fears of a prolonged
impact on global growth.
    Brazil's real, which had been steadily hitting new lows even
before the outbreak due to flailing fundamentals, has losses of
almost 21% so far this year. It is one of the worst-performing
among commonly watched emerging market currencies, outdone by
oil exporter Russia's ruble and Mexico's peso.
    With the dollar expected to bounce back amid rising
uncertainty, the real may remain pressured over the next three
months, wrote Mauricio Une, senior strategist, Brazil, at
    Mexico's currency hit yet another all-time low of 25.444
during Asian hours but recovered some ground, putting it on
track for its first session of gains in 10. The currency has
been hammered by carry trade unwind and an oil shock further
pressuring a weak economy. 
    "We don't expect to see USD/MXN trading with an 18 handle
again even looking beyond the Covid-19 impact," said Christian
Lawrence, senior market strategist, Mexico, at Rabobank. "In the
short term we could even see a 26 handle." 
    The pandemic has also pushed currencies of Colombia
and Chile to lifetime lows recently as oil and copper prices
have tanked. Rising oil prices on Tuesday helped crude producer
Colombia's currency rise 1.6%. Late on Monday, its central bank
said it could buy $2.94 bln in debt to boost liquidity.

    Key Latin American stock indexes and currencies at 1415 GMT:
  Stock indexes           Latest    Daily % change
 MSCI Emerging Markets     801.63               5.73
 MSCI LatAm               1498.97               8.39
 Brazil Bovespa          69335.22               9.07
 Mexico IPC              34111.51               3.48
 Chile IPSA               3035.37               4.75
 Colombia COLCAP           908.50              -1.21
      Currencies          Latest    Daily % change
 Brazil real               5.0611               1.47
 Mexico peso              24.9170               1.69
 Chile peso                 846.4               1.67
 Colombia peso            4109.52               1.67
 Peru sol                  3.5217               0.28
 (Reporting by Susan Mathew in Bengaluru; Editing by Dan