February 3, 2020 / 8:29 PM / 21 days ago

EMERGING MARKETS-Chilean peso outperforms steady Latam FX after upbeat economic data

    * Chilean peso firms as much as 2% 
    * Brazil manufacturing PMI rises in January
    * Buenos Aires races to seal 2021 bond deal
    * Mexican markets shut on Monday 

 (Adds details, updates prices)
    By Sruthi Shankar
    Feb 3 (Reuters) - The Chilean peso led Latin American
currencies higher on Monday as upbeat economic data from the
world's top copper producer played into a positive global mood
following a damaging week on concerns about the coronavirus
outbreak.
    The peso firmed as much as 2% to 783.22 per dollar
after central bank figures showed a 1.1% rise in Chile's
economic activity in December, buoyed by a resilient mining
sector.
    The peso touched historic lows last year after months of
violent anti-government protests, but has bounced off those lows
amid signs of a stabilizing economy.
    "The strong data somewhat undercut the central bank's dovish
stance expressed at last week's meeting," Citi analysts wrote in
a note.
    "The beat was more or less expected after strong IP
(industrial production) and retail sales data on Friday," they
added. 
    Global sentiment brightened on Monday after China's central
bank unexpectedly cut interest rates on reverse repurchase
agreements by 10 basis points to relieve pressure on the economy
from a rapidly spreading virus outbreak.

    Chinese stocks slumped 8% as investors returned from the
Lunar New Year holidays, although the central bank's move
supported risk sentiment in European and U.S. trading hours.
    After recording the worst weekly decline since mid-August,
the MSCI's index for Latin American currencies
rose 1.5% on Monday, with Brazil's Bovepsa gaining over
1%.  
    Brazil's real bounced back from a record low in the
previous session as data showed growth in manufacturing sector
picked up in January.
    All eyes are on the central bank meeting on Wednesday, with
majority of the economists forecasting a 25 basis point cut to
the key Selic rate to support a still-sluggish recovery.
 
    In Argentina, Buenos Aires province has offered to make a
$75 million capital payment on a 2021 bond, a last-gasp move to
encourage holders of the debt to accept its proposal to delay a
larger repayment and avoid the risk of falling into default.

    The Argentine peso eased slightly against the dollar.
    A market holiday in Mexico kept its peso little
changed.     
    
    Key Latin American stock indexes and currencies at 1951 GMT:
    
      Stock indexes                 Latest       Daily %
                                                  change
 MSCI Emerging Markets                1061.13         -0.11
                                               
 MSCI LatAm                           2792.91           1.5
 Brazil Bovespa                     115143.92          1.22
 Mexico IPC                                -              -
 Chile IPSA                           4579.45          0.16
                                               
 Argentina MerVal                    41396.56          3.22
 Colombia COLCAP                      1622.41         -0.09
                                                           
          Currencies                Latest       Daily %
                                                  change
 Brazil real                           4.2471          0.89
                                               
 Mexico peso                          18.8051          0.16
                                               
 Chile peso                             787.1          1.52
 Colombia peso                         3393.5          0.69
 Peru sol                               3.371          0.39
                                               
 Argentina peso (interbank)           60.4650         -0.20
                                               
 
    
    

 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru;
Editing by Dan Grebler and Diane Craft)
  
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