June 24, 2019 / 8:26 PM / 25 days ago

EMERGING MARKETS-Brazil, Mexico currencies slip, Latam stocks mostly gain

 (Updates prices)
    By Susan Mathew
    June 24 (Reuters) - Mexico's peso and the Brazilian real
fell on Monday, while most other Latin American currencies
firmed against a weaker dollar as investors awaited the G20
summit where the U.S. and Chinese presidents are expected to
meet to revive trade talks.
    Argentina's peso rose 0.9% as the dollar weakened on
bets the Federal Reserve may cut interest rates more than once
this year, while currencies in Chile and Peru
gained 0.1% and 0.4% respectively, with Chile's peso on track to
post gains for a fifth straight session.
    Investors are watching for the outcome of a meeting between
U.S. President Donald Trump and his Chinese counterpart Xi
Jinping on the sidelines of the G20 summit that begins on
Friday, when they are expected to revive trade discussions. 
    "We anticipate that a pledge to return to negotiations will
be more likely - an outcome that should continue to support risk
in the coming weeks and exacerbate USD momentum to the
downside," wrote Mazen Issa, a senior FX analyst at TD
Securities.
    Brazil's real fell 0.1% after four days of gains,
while Mexico's peso slipped 0.3%, in a week that will
culminate in a Bank of Mexico interest rate meeting on Friday.
    "We expect little dovish bias from Banxico due to
developments in the core inflation and inflation expectations
complex," wrote Sacha Tihanyi, deputy head of emerging markets
strategy at TD.
    "Any dovish messaging will come via the growth outlook,
however these concerns will not dominate inflation expectations
and core price dynamics, which currently do not imply rates cuts
at this point in time," he said, adding that an unexpectedly
dovish statement may push fixed income inflows and bolster the
currency.
    Data on Monday showed that Mexican inflation rose at a
slightly slower-than-expected pace in the first half of June.
Another set showed the country's economy grew only slightly in
April, and contracted by 1.4 percent compared to a year ago.

    In Brazil, a central bank survey showed that the outlook for
Brazil's economy continued to deteriorate.
    Separate data showed that the current account swung back
into surplus from a deficit the prior month, albeit below
expectations. May foreign capital flows, however, rose to the
highest in years.
    Among stocks, Argentine shares slipped 0.6%, while those in
Chile and Mexico gained. Brazil shares
traded flat, having scaled fresh life highs earlier in the
session. 
    Airline stocks Gol Linhas and Brazil listed
shares of Azul SA lost 0.1% and 0.8%, respectively. 
    Brazil's antitrust regulator said it wants new rules for
allocating airplane landing and departure rights in Sao Paulo's
crowded domestic airport, saying they are too concentrated among
two main airlines - LATAM Airlines and Gol.
    LATAM Airlines shed almost 1%.
    Markets in Colombia were closed for a local holiday. 

    Key Latin American stock indexes and currencies at 2003 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1054.06      0.08
                                        
 MSCI LatAm                    2876.74     -0.09
                                        
 Brazil Bovespa              102100.01      0.09
                                        
 Mexico IPC                   43727.09      0.46
                                        
 Chile IPSA                    5092.48      0.64
                                        
 Argentina MerVal             40053.77      -0.6
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8263     -0.01
                                        
 Mexico peso                   19.1904     -0.37
                                        
 Chile peso                      680.6      0.46
                                        
 Peru sol                        3.301     -0.03
                                        
 Argentina peso                42.4200      0.90
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Susan Thomas)
  
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