November 21, 2017 / 9:39 PM / a year ago

EMERGING MARKETS-Brazil stocks rise, Mexico peso firm as NAFTA talks end for now

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Nov 21 (Reuters) - Brazilian stocks rose on
Tuesday, touching a three-week high amid rising investor hopes
that lawmakers will approve a plan to streamline the social
security system, while the Mexican peso strengthened to its
highest level in a month. 
    Concerns over Brazilian President Michel Temer's ability to
pass the controversial measure had spooked local markets
following a smaller-than-expected show of support for the
center-right president in a recent vote.
    But efforts by Temer to appease Brazilian lawmakers have
rekindled expectations that the bill, seen as critical to
boosting long-term growth, will be approved, even if the
government needs to water it down to do so.
    Temer tapped an ally of House Speaker Rodrigo Maia as
minister in a bid to garner more lawmakers' support, three
sources told Reuters on Monday, further assuaging investor
    "Signs of common ground between Temer and Maia suggest some
sort of political compromise and real chances that the pension
reform is approved," analysts at Lerosa Investimentos brokerage
wrote in a client note.
    The benchmark Bovespa stock index rose 1.58 percent,
with blue-chip shares such as lender Itaú Unibanco Holding SA
 and miner Vale SA posting gains.
    In Mexico, the peso strengthened 1.06 percent, as the fifth
round of talks to repurpose the North American Free Trade
Agreement (NAFTA) drew to a close with major differences yet to
be resolved, casting doubt on whether a deal could be reached by
the end of March 2018 as planned.
    The 1994 agreement underpins much of the more than $1
trillion in annual trilateral trade between the United States,
Mexico and Canada, but Washington's repeated threats to walk
away from the pact unless it is reworked in the United States'
favor have spooked markets.
    Canada and Mexico object to a series of contentious demands
the United States unveiled during the fourth round last month
and the three countries made little progress in Mexico City.
    The peso traded at 18.7905 pesos per dollar on Tuesday
    Key Latin American stock indexes and currencies at 2107 GMT:
 Stock indexes                 Latest      Daily    YTD pct
                                            pct      change
 MSCI Emerging Markets          1,152.53      1.45     31.76
 MSCI LatAm                     2,813.48       1.8     18.07
 Brazil Bovespa                74,594.61      1.58     23.86
 Mexico IPC                    48,190.23       0.7      5.58
 Chile IPSA                     5,199.04      2.42     25.24
 Chile IGPA                    26,150.52      2.13     26.12
 Argentina MerVal              27,266.05      0.51     61.17
 Colombia IGBC                 10,822.33      0.04      6.85
 Venezuela IBC                    699.28     -0.06    -97.79
 Currencies                    Latest      Daily    YTD pct
                                            pct      change
 Brazil real                      3.2580     -0.19     -0.27
 Mexico peso                     18.7905      1.06     10.40
 Chile peso                       634.15      0.51      5.76
 Colombia peso                  2,992.75      0.51      0.29
 Peru sol                          3.236      0.06      5.50
 Argentina peso (interbank)      17.4700      0.09     -9.13
 Argentina peso (parallel)         18.07      0.11     -6.92
 (Reporting by Bruno Federowski and Gabriel Stargardter; editing
by G Crosse)
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