Bonds News

EMERGING MARKETS-Latam currencies miss out on trade rally as Brazil's real drags

    * Latam assets fall as economic uncertainty weighs
    * Brazilian real hits one-month low
    * Mexican peso, Chilean peso slide
    * Broader optimism fueled by imminent U.S.-China trade deal
    * Brazil's Cemig hits seven-month high on CEO appointment

    By Sagarika Jaisinghani and Ambar Warrick
    Jan 13 (Reuters) - Latin American currencies tumbled on
Monday, led by the Brazilian real, as prolonged economic
uncertainty in the region more than offset broader optimism
about an imminent U.S.-China trade deal.
    A basket of Latin American currencies shed
1.2% and was on course for its worst day in four-and-a-half
    The Brazilian real lost about 0.9% to hit its lowest
level in a month, while the Mexican peso shed 0.3% and
the Chilean peso eased more than half a percent versus a
stronger dollar.
    Latin American equities were also down 0.4%,
in sharp contrast to global stocks, which nudged higher to hover
near all-time highs as investors awaited the signing of the
Phase 1 Sino-U.S. trade deal on Jan. 15.
    "We do have some domestic factors in Latam that have weighed
somewhat and there is a little bit of a view that this trade
deal, at the margin, is benefiting other regions more than
Latam," said Christian Lawrence, senior market strategist at
Rabobank in New York.
    Demand for riskier Latin American assets had waned last week
as tensions between Washington and Tehran grew after the United
States killed a top Iranian general in a drone strike, prompting
a retaliation.
    While global sentiment has since improved as both countries
signaled no further escalation in military tensions, investors
in Latin America have stayed on the sidelines as economies
grapple with a clutch of weak data, including faltering regional
    Latest data from Mexico showed gross fixed investment fell
1.5% in October from September and 8.6% versus a year earlier.

    Although major central banks stepped in last year with
several rounds of monetary stimulus, Latin American currencies
are expected to tread carefully this year, partly on concerns
about more protectionist talk in the 2020 U.S. presidential
elections, a Reuters poll showed.
    Brazil's central bank is next due to meet on Feb. 4 and 5,
where it will comment on further interest rate cuts after four
consecutive reductions last year.
    Among individual stocks, Brazilian state-run power firm
Cemig rose as much as 2.6% to a seven-month high
after its board named Reynaldo Passanezi Filho as chief
executive officer, effective Monday.
    The broader Brazilian equity index added about 1%.
    Latin American stock indexes and currencies at 1501 GMT:    
     Stock indexes              Latest    Daily % change
 MSCI Emerging Markets           1142.52             0.78
 MSCI LatAm                      2905.20            -0.43
 Brazil Bovespa                116699.16             1.04
 Mexico IPC                     44767.42             0.24
 Chile SPIPSA                    4994.58            -0.03
 Argentina MerVal               42566.50           -0.407
 Colombia Colcap                 1652.90            -0.12 Currencies              Latest    Daily % change
 Brazil real                      4.1325            -0.95
 Mexico peso                     18.8450            -0.34
 Chile peso                        778.5            -0.86
 Colombia peso                   3294.19            -0.79
 Peru sol                         3.3388            -0.23
 Argentina peso (interbank)      59.8150                -

 (Reporting by Sagarika Jaisinghani in Bengaluru; editing by
Grant McCool)