September 6, 2019 / 8:24 PM / 2 months ago

EMERGING MARKETS-Latam assets rise, lifted by China stimulus, U.S. rate cut bets

 (Updates prices, changes analyst's quote)
    By Sruthi Shankar
    Sept 6 (Reuters) - An index of Latin American currencies
rose on Friday, on track to record its first weekly gain in
seven weeks, as China's move to boost lending boosted their
appeal to investors, as did slower U.S. job growth.
    Signs of resumption in U.S.-China trade talks and easing
political tensions in Asia and Europe this week prompted
investors to buy back into battered developing world stocks and
currencies.
    With the dollar on the backfoot, the Mexican peso
jumped 1% to touch a three-week high on Friday, while currencies
of Brazil, Colombia, Chile and Argentina
 rose between 0.43% and 0.86%.
    U.S. jobs numbers painted a mixed picture of the world's
largest economy, as hiring slowed more than expected and wage
gains picked up. This fueled expectations of further rate cuts
from the Federal Reserve this year.
    Meanwhile, China's central bank said it was cutting the
amount of cash that banks must hold, releasing 900 billion yuan
($126.35 billion) in liquidity to shore up the flagging economy.

    MSCI's index of Latin American currencies,
which edged higher for a third session, was set to finish the
week with a 1.8% gain, its biggest such since early February.
    "Various events have improved the risk backdrop this week
for EM. Yet the case for a sustained rebound is challenging,"
Morgan Stanley analysts wrote in a note. "Nonetheless, we see a
tactical opportunity to add some risk."
    Brazil's real rose 0.8% on Friday after data showed
consumer price inflation was well contained in August,
reinforcing expectations of deeper rate cuts by the central bank
as it tries to fire up economic growth.
    After falling for seven weeks in a row - its longest losing
streak this year - the real rose around 1.8% on the week,
hitting a two-week high of 4.05 per dollar.
    The Argentine peso recorded its biggest weekly gain since
October 2018 after the country imposed capital controls. The
currency has been battered since President Mauricio Macri
suffered a thumping defeat in primaries at the hands of Alberto
Fernandez. 
    Equities in the region moved mostly higher, with Sao Paulo's
Bovespa index up 0.7% on the day, helped by strong gains
in banking shares. 
    In some relief for battered emerging markets, specialist
emerging market investor Ashmore said on Friday it saw its
assets under management grow by 24% for the year ending June 30,
helped by both inflows and positive market performance.


 Latin American stock indexes and currencies at 1930 GMT:
 
 MSCI Emerging Markets                    1008.57        0.55
 MSCI LatAm                               2679.69        1.02
 Brazil Bovespa                         102993.86        0.73
 Mexico IPC                              42820.46        0.21
 Chile IPSA                               4830.69        0.27
 Argentina MerVal                        27141.42       0.777
 Colombia IGBC                           12700.12       -0.01
                                                             
           Currencies                  Latest       Daily %
                                                     change
 Brazil real                               4.0735        0.86
 Mexico peso                              19.5536        1.01
 Chile peso                                711.05        0.62
 Colombia peso                            3351.25        0.69
 Peru sol                                   3.342        0.66
 Argentina peso (interbank)               55.8000        0.43
                                                   
 

 (Reporting by Sruthi Shankar and Agamoni Ghosh in Bengaluru; ;
Editing by Sandra Maler)
  
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