(New throughout, updates prices, market activity and comments) * Brazil industrial output slumps more than expected * Mexican peso falls; inflation falls further below target * Buenos Aires bond payment eyed By Susan Mathew Jan 9 (Reuters) - Latin American stocks and currencies bucked a rally in global markets on Thursday, with Brazil shares extending losses to a fifth day due to disappointing economic data. MSCI's index of Latam currencies slipped 0.4%, while its stocks counterpart fell 0.7%. A day after markets worldwide rallied following a de-escalating tone from Washington and Tehran regarding their conflict, global investors cheered news that China's Vice Premier Liu He would sign a Phase 1 trade deal with the United States next week. Still, "until these events are formally announced and signed, the market will stay at this current level," said Ricardo Gomes da Silva, director of Correparti Corretora. Latam currencies gave up last session's gains with Brazil's real down 0.6% as data showed a sharper-than-expected slump in industrial production. The data means "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. Mexico's peso retreated from near nine-month highs after official numbers showed consumer price inflation ended 2019 further below the central bank's target, fueling expectations of additional rate cuts by the central bank. A Reuters poll suggested investor caution about Latam currencies in 2020 due to regional political tensions and worries over protectionist talk in the coming U.S. presidential election campaign. Stocks listed in Sao Paulo slipped 0.5% with payments company Cielo the biggest decliner on the benchmark index after a ratings downgrade. Tracking crude prices lower, oil firm Ecopetrol dragged Colombia's COLCAP index index lower for a third straight session. Mexico's IPC index traded flat. In Argentina, debt talks face their first big test this month with a $277-million payment due on a Buenos Aires provincial bond, seen as a gauge of how the indebted South American nation's new government will handle creditors. Argentina, which spiraled into a debt crisis last year and has been grappling with recession, faces broader restructuring talks on around $100 billion in debts, including a huge loan from the International Monetary Fund. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1128.50 1.54 MSCI LatAm 2904.17 -0.72 Brazil Bovespa 115715.64 -0.46 Mexico IPC 44433.20 -0.08 Chile IPSA 4898.40 -0.23 Argentina MerVal 41829.23 1.983 Colombia COLCAP 1643.50 -0.81 Currencies Latest Daily % change Brazil real 4.0871 -0.87 Mexico peso 18.8550 -0.25 Chile peso 767.45 -1.26 Colombia peso 3252.9 -0.34 Peru sol 3.32 -0.18 (Additional reporting by Luana Maria Benedito in Sao Paulo, Sagarika Jaisighani and Ambar Warrick in Bengaluru; Editing by David Gregorio)
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