Bonds News

EMERGING MARKETS-Latam FX subdued as dollar strengthens; Chilean peso tumbles

    * Chilean peso falls for third straight day 
    * Brazilian real steadies after previous session's surge
    * Petrobras CEO denies claims of 'predatory' fuel pricing

    By Shreyashi Sanyal
    Jan 13 (Reuters) - Latin American currencies were mostly
muted on Wednesday, with Chile's peso tumbling for the third
straight session as steadying U.S. Treasury yields helped
support the dollar. 
    The peso slid 2.5% in early trading against the
dollar, recently coming under pressure from weaker prices of
copper, the country's main export, on demand worries as top
consumer China imposed new curbs due to the spread of the
    Consensus notes that after months of anti-government
protests in late 2019 and the pandemic have created fertile
ground for populists in Chile, and a divided political system
may make fiscal consolidation more difficult to achieve. 
    Chileans are also gearing up to vote for its new 155-members
constitutional body in April. 
    Most other currencies in Latin America traded in a tight
range against a rising dollar, even as near-term
prospects for the safe-haven currency remained bearish.
    Brazil's real traded 0.5% higher on Wednesday,
after recording its best day since late August 2020 in the
previous session. 
    Data showed services activity in Brazil rose for a sixth
consecutive month in November, more than twice as fast as
analysts had expected and suggesting Latin America's largest
economy went into the year-end on strong footing.
    "A normalization of key rates is likely to stabilize BRL
over the course of 2021 but in view of the continued negative
interest rates it will not allow for a rally," said Melanie
Fischinger, FX and emerging market analyst at Commerzbank.
    "Uncertain fiscal policy discipline and a slowing reform
process could put considerable pressure on the real from time to
    Mexico's peso was flat, while Colombia's peso
gained 0.4%. 
    Colombia's Bogota will impose strict two-week quarantines on
six more neighborhoods starting next week, Mayor Claudia Lopez
said on Tuesday, as the city moves to control a second wave of
    Among stocks in the region, Brazil's Bovespa ticked
0.4% lower, with state-run oil giant Petroleo Brasileiro SA
 falling 0.2%. 
    Roberto Castello Branco, chief executive of Petrobras, has
dismissed accusations from private fuel importers that the firm
is enforcing a price policy that does not reflect market
    Key Latin American stock indexes and currencies at 1420 GMT:
         Stock indexes                  Latest   Daily %
 MSCI Emerging Markets                  1360.82     0.54
 MSCI LatAm                             2522.36     1.17
 Brazil Bovespa                       123052.27    -0.76
 Mexico IPC                                0.00        0
 Chile IPSA                             4632.41      0.7
 Argentina MerVal                          0.00        0
 Colombia COLCAP                        1461.73        0
             Currencies                 Latest   Daily %
 Brazil real                             5.2926     0.49
 Mexico peso                            19.7650     0.04
 Chile peso                                 737    -1.67
 Colombia peso                          3465.14     0.28
 Peru sol                                3.6058     0.11
 Argentina peso (interbank)             85.5500    -0.09
 Argentina peso (parallel)                  155     2.58

 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Bernadette Baum)