EMERGING MARKETS-Brazilian real leads Latam currencies lower; Mexican peso at eight-month high

    * Brazil industrial output slumps more than expected
    * Real set for worst day in nearly a week
    * Mexican peso firms as inflation data improves
    * Global sentiment brightens on cooling U.S.-Iran tensions

    By Sagarika Jaisinghani and Ambar Warrick
    Jan 9 (Reuters) - The Brazilian real dipped on Thursday
after data showed a sharper-than-expected slump in industrial
production, but the Mexican peso rose for the second day and
remained near an eight-month high on cooling U.S.-Iran tensions
and better-than-expected inflation figures.
    The Brazilian real eased 0.4%, on course for its
biggest daily decline in nearly a week. Data showed the
country's factory output dropped 1.2% in November after rising
for three months in a row.
    The currency was battered during 2019, partly due to
Brazil's failed oil aucitons but the real ended with a strong
month of December. Still, recent indicators from Latin America's
largest economy remained mixed.
    The data "serves as a timely reminder that while we're
getting a bit of optimism about the prospects of Brazil's
economy this year, it's still a pretty slow and fragile
recovery," said William Jackson, chief emerging markets
economist at Capital Economics in London.
    A wider index of Latin American currencies
was down 0.2%, with the Chilean peso easing 0.6% against
a firmer dollar.
    But the Mexican peso rose for a second day, as data
showed a 2.83% rise in consumer prices in the year through
December, compared with a Reuters poll of 2.76%.
    Globally, investor sentiment brightened as the United States
and Iran backed away from further military action.
    "With Iran now seemingly in the rearview mirror, (emerging
market currencies) will be driven once more by hopes for a
cyclical improvement outside of the U.S.," said Dirk Willer,
Citigroup's global head of emerging market strategy.
    "While the case for that is still speculative, we believe
hope will prevail at least early this year, and EMFX will trade
well."
    Global equities drew support from news in Beijing that Vice
Premier Liu He would sign a Phase 1 trade deal in Washington
next week.
    In Latin America, Argentina's MerVal rose 0.8% in
early trading, while Peruvian stocks added about
0.1%. 
    Among individual stocks, shares in Brazilian meatpacker
Marfrig jumped 4% after a report the company was
preparing to launch a "vegan pork meat" product.
        
    Key Latin American stock indexes and currencies at 1459 GMT:
     Stock indexes               Latest    Daily % change
 MSCI Emerging Markets            1129.63             1.64
                                           
 MSCI LatAm                       2916.93            -0.28
                                           
 Brazil Bovespa                 116001.73            -0.21
                                           
 Mexico IPC                      44488.90             0.04
                                           
 Chile SPIPSA                     4896.32            -0.27
                                           
 Argentina MerVal                41358.05            0.834
                                           
 Colombia Colcap                  1654.21            -0.17 Currencies              Latest    Daily % change
 Brazil real                       4.0775            -0.64
                                           
 Mexico peso                      18.7968             0.06
                                           
 Chile peso                        764.46            -0.88
                                           
 Colombia peso                    3251.91            -0.30
 Peru sol                          3.3188            -0.14
                                           
 Argentina peso (interbank)       59.8150                -
                                           
 
 (Reporting by Sagarika Jaisinghani, Ambar Warrick and Medha
Singh in Bengaluru; Editing by David Gregorio)