July 8, 2019 / 2:41 PM / 8 days ago

EMERGING MARKETS-Latam currencies firm, Brazil's real gains on pension-reform hope

    July 8 (Reuters) - Latin American currencies srengthened on
Monday, bucking gloom in emerging markets, with Brazil's real
gaining nearly half a percent as investors cheered progress in
the government's pension reform bill.
    The real firmed to 3.8057 per dollar after Brazilian
House speaker Rodrigo Maia said on Saturday he expects the lower
house of Congress to begin voting on the bill on Tuesday.

    A special pension reform committee in Congress passed the
basic text of a bill that aims to generate savings of around 1
trillion reais ($264 billion) over 10 years, shore up public
finances, and spur investment and economic growth.
    Waldery Rodrigues, the special secretary to the Economy
Ministry, said the bill's approval will boost gross domestic
product growth by at least 0.4-0.5 percentage point a year.
    The main Bovespa stock index edged higher to extend
its record run, helped by gains in miner Vale SA,
which rose 1.2% as Dalian-traded iron ore prices jumped as much
as 2.5% on expectations that demand for the steelmaking raw
material will be strong. 
    The Mexican peso gained about 0.5%, while the Chilean
peso CLP and the Colombian peso also rose against
the dollar.
    The gains follow a weak session for emerging currencies on
Friday after strong U.S. jobs numbers cooled expectations the
Federal Reserve will cut interest rates by 50 basis points in
its July meeting, supporting the dollar.      
    "We think it'll (the weakness) be short-lived and recommend
buying dips, particularly in EM currencies," Morgan Stanley
analysts wrote in a note. "Even if the Fed only cuts 25bp (MS
expecting 50bp) but provides dovish guidance, then we'd expect
the bid for EM currencies to remain."
    Investors are looking ahead to Fed Chairman Jerome Powell's
semi-annual testimony to the U.S. Congress on July 10-11 for 
clues on the direction of monetary policy.
    Markets in Argentina were shut for a public holiday on
Monday and Brazilian exchanges will be closed on Tuesday for a
regional holiday. 

    Latin American stock indexes and currencies at 1406 GMT
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1047.07    -1.21
                                     
 MSCI LatAm                 2926.30     0.57
                                     
 Brazil Bovespa           104193.06      0.1
                                     
 Mexico IPC                43346.84    -0.13
                                     
 Chile IPSA                 5057.55     0.36
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC             12819.88    -0.17
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.8068     0.41
                                     
 Mexico peso                18.9193     0.47
                                     
 Chile peso                   683.2     0.02
                                     
 Colombia peso              3202.71     0.14
                                     
 Peru sol                     3.288     0.06
                                     
 Argentina peso                   -        -
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru)
  
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