September 5, 2017 / 3:45 PM / in 10 months

EMERGING MARKETS-Brazil markets rise as Batista plea deal threatened

    By Bruno Federowski
    SAO PAULO, Sept 5 (Reuters) - Brazil's stocks and currency
rose on Tuesday after the country's top prosecutor threatened to
partially revoke a plea deal that has supported corruption
charges against President Michel Temer.
    Traders said that could allow the government to focus on its
market-friendly reform agenda.
    Prosecutor General Rodrigo Janot said that billionaire meat
tycoon Joesley Batista and a fellow state's witness seemed to
have inadvertently recorded a four-hour conversation discussing
crimes not covered in their plea bargain.
    Traders said the news drew fresh scrutiny to the accord and
could delay or weaken new charges that Janot was expected to
bring against Temer in coming weeks. 
    "This should bolster optimism among government allies in
Congress toward a potential approval of pension reform this year
still," traders at Correparti brokerage wrote in a client note.
    The Brazilian real strengthened as much as 0.8
percent to a one-month high. The cost of insuring against a
Brazilian sovereign default for 5 years fell to
the lowest in almost three years.
    The country's benchmark Bovespa stock index briefly
breached the 73,000 milestone for the first time since 2008,
lifted by blue-chips such as state-controlled oil company
Petróleo Brasileiro SA, state lender Banco do Brasil
SA and miner Vale SA.
    Shares of JBS SA, the meatpacker owned by the
Batista brothers, slumped as much as 10 percent, their biggest
daily decline in 14 weeks. 
    Other Latin American currencies also traded higher after an
influential Federal Reserve policymaker said the U.S. central
bank should be cautious about raising interest rates until it is
confident that inflation will rebound toward its 2 percent
    A recent string of weaker-than-expected U.S. economic
figures has cast doubt on the Fed's plan to hike rates a third
time this year, fostering demand for high-yielding emerging
market assets.
    Key Latin American stock indexes and currencies at 1500 GMT:
 Stock indexes                                  daily %   YTD %
                                      Latest     change  change
 MSCI Emerging Markets                1086.60       0.3   25.64
 MSCI LatAm                           2918.90      0.61   23.95
 Brazil Bovespa                      72431.71      0.42   20.26
 Mexico S&P/BVM IPC                  50619.26     -0.41   10.90
 Chile IPSA                           5141.94     -0.12   23.86
 Chile IGPA                          25705.15     -0.06   23.97
 Argentina MerVal                    23890.12      0.77   41.21
 Colombia IGBC                       11248.02       0.1   11.06
 Venezuela IBC                      264814.53      0.08  735.24
 Currencies                                     daily %   YTD %
                                                 change  change
 Brazil real                           3.1184      0.58    4.19
 Mexico peso                          17.7900      0.48   16.60
 Chile peso                            620.45      0.60    8.10
 Colombia peso                         2917.7      0.39    2.87
 Peru sol                               3.235      0.06    5.53
 Argentina peso (interbank)           17.2650      0.09   -8.05
 Argentina peso (parallel)              18.04      0.33   -6.76
 (Reporting by Bruno Federowski; Editing by Dan Grebler)
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