April 12, 2019 / 9:34 PM / 10 days ago

EMERGING MARKETS-Latam FX mostly firm; Brazil hit by Petrobras, pension woes

 (Recasts throughout, updates prices)
    By Susan Mathew
    April 12 (Reuters) - Most Latin American currencies firmed
against a weaker U.S. dollar on Friday amid signs of
stabilization in China's economy, while assets in Brazil fell as
a slump in Petrobras and uncertainty around much
anticipated pension reforms weighed.
    Data on Friday showed that China's exports rebounded to a
five-month high in March, but imports shrank for a fourth
straight month and at a faster pace, painting a mixed picture of
the economy.
    "While the market has been expecting better China data,
positioning is still light. We are positive on Latam FX as the
better China sentiment is gathering steam," analysts at Citi
Research said in a note.
    Mexico's peso rose 0.4 percent and touched its
highest level in over three weeks during the session. The
currency firmed four out of five days this week, taking gains on
the week to 1.7 percent. 
    Higher oil prices also aided the currency's gains as well as
crude-exporting peer Colombia's peso currency. Chile's
peso scaled a five-week high during the session and
closed 0.5 percent higher.
    While most other regional stock indexes ended the day lower,
shares in Mexico closed up 0.2 percent boosted by an 11
percent surge in Santander Mexico after its Spanish
parent offered to take full control of its Mexican
business through a 2.6 billion euro ($2.9 billion) deal.

    In Brazil, the currency ended about 0.6 percent
lower, while stocks slid nearly 2 percent and hit an
over two-week low. 
    Brazil's Petroleo Brasileiro SA
slumped over 7.7 percent after it canceled a diesel price hike
as President Jair Bolsonaro called for "fair" prices out of
concern for truckers, spooking investors wary of political
interference at the state-run oil firm.
    "The question is to what extent this decision was technical
and absent of political interference - which is something that
we have seen happen in the past and left the state in a
complicated situation," said Sabrina Cassiano an analyst at
Coinvalores.
    Meanwhile, as debates about the pension reform proposal
progress, Brazilian police accused lower house speaker Rodrigo
Maia of receiving bribes totaling at least 1.4 million reais
($361,869).
    The accusations could prove a headache for Bolsonaro's
government, which is relying on Maia to guide its thorny reforms
through an unpredictable Congress.
    Uncertainties over the pace of reform have haunted markets
in recent days with the local stock index slipping for the
fourth straight session and logging a weekly loss of 4.4
percent.
        
    Key Latin American stock indexes and currencies at 2100 GMT:
       Stock indexes           Latest     Daily %
                                           change
 MSCI Emerging Markets          1,089.09      0.15
                                          
 MSCI LatAm                     2,760.61     -1.67
 Brazil Bovespa                92,875.00     -1.98
 Mexico IPC                    44,686.06      0.24
 Chile IPSA                     5,239.57     -0.29
 Argentina MerVal              31,357.03     -0.46
 Colombia IGBC                 13,130.10     -0.19
                                                  
         Currencies            Latest     Daily %
                                           change
 Brazil real                      3.8812      0.59
 Mexico peso                     18.7508      0.40
 Chile peso                        660.8      0.64
 Colombia peso                  3,113.03      0.16
 Peru sol                          3.297      0.03
 Argentina peso (interbank)      42.1800      1.35
                                          
 

 (Reporting by Susan Mathew in Bengaluru and Paula Arend Laier
in Sao Paulo; editing by G Crosse)
  
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