May 14, 2019 / 9:34 PM / in 6 days

EMERGING MARKETS-Latam assets rise as chilly U.S.-China trade ties appear to thaw

 (Recasts throughout, updates prices, adds market strategist's
quote)
    By Aaron Saldanha
    May 14 (Reuters) - Most Latin American stock markets rose on
Tuesday, gaining back some ground lost in the previous session,
while Latin America's currencies firmed against the dollar as
traders raised their risk exposures after U.S. President Donald
Trump downplayed the U.S.-China trade war.
    Trump said talks had not collapsed, while a spokesman for
China's foreign ministry said the countries agreed to continue
talks trade, aiding a recovery in risk sentiment after it
slumped on Monday.    
    MSCI's index of Latin American stocks rose
0.8%, while its Latin American currencies index
gained 0.4%.
    Mexican stocks gained 0.7%, and the peso
firmed 0.4%.
    Banco de Mexico (Banxico) is seen holding its key interest
rate steady at 8.25% on Thursday amid signs of
economic weakness and an acceleration of inflation in April, a
Reuters poll showed.
    "The risk-off nature of financial markets this week will
also potentially sensitize the nature of the market reaction to
any hypothetical appearance of dovishness coming from Banxico,
despite the fact Mexico's peso has held in reasonably well,"
Sacha Tihanyi, TD Securities' deputy head of emerging markets
strategy, wrote in a note. 
    Brazilian stocks added 0.4%, aided by gains among
consumer staples and materials. The real firmed 0.5%.
    The government and central bank said Brazil's economic and
fiscal health was deteriorating rapidly, as yet another economic
indicator suggested the country may be sliding closer toward
recession.
    The economy may have contracted slightly in the first
quarter, according to minutes from the bank's latest policy
meeting.
    JBS SA surged 8.4% as its executives said the
world's top meatpacker is poised to reap the benefits from
additional demand after an African swine fever outbreak in
China.
    Vale SA gained 0.3% , following Monday's 4.1%
drop. The miner is considering doubling its Carajas Serra Sul
iron ore mine's output after 2020.
    Preferred shares of Azul declined 4%. The airline
made a new attempt on Monday to buy some of bankrupt Avianca
Brasil's most coveted routes, offering $145 million and
reversing a decision not to participate.    
    Stocks in Argentina gained 0.7% on rising risk
sentiment, while the country's peso firmed.
    Chilean stocks climbed 1%, while the peso
 rose after copper prices rebounded. The
industrial metal is Chile's top export.          
        
    Latin American stock indexes and currencies at 2057 GMT
    
 Stock indexes                                     daily %
                                       Latest       change
 MSCI Emerging Markets                   1014.48      -0.2
 MSCI LatAm                              2606.37      0.78
 Brazil Bovespa                         92092.44       0.4
 Mexico IPC                             43431.53      0.67
 Chile IPSA                              5018.93      0.98
 Argentina MerVal                       32510.83      0.65
 Colombia IGBC                          12291.59     -0.58
                                                          
 Currencies                                        daily %
                                                    change
                                          Latest  
 Brazil real                              3.9746      0.02
 Mexico peso                             19.1541      0.36
 Chile peso                                690.9      0.36
 Colombia peso                            3288.6      0.44
 Peru sol                                  3.322      0.15
 Argentina peso (interbank)              44.9300      0.56
                                                  
 
 (Reporting by Aaron Saldanha in Bengaluru; 
Editing by Sandra Maler)
  
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