April 23, 2019 / 3:24 PM / a month ago

EMERGING MARKETS-Latam FX weakens, Brazilian stocks up on pension reform hopes

    By Aaron Saldanha
    April 23 (Reuters) - Latin American currencies broadly
softened against a robust dollar on Tuesday, while a surge in
Brazilian shares on hopes lawmakers would approve a bill to
reform the country's bloated pension system helped a key stocks
index avoid a steeper loss. 
    Brazil's pensions secretary said details of the government's
pension reform proposal were still being ironed out prior to a
congressional committee vote in the afternoon, with several
local newspapers reporting the government had agreed to alter
certain minor provisions.    
    A report said the changes to the proposal agreed by
President Jair Bolsonaro's government should not affect targeted
savings from the overhaul of the system.
    "After last week's market reaction to the vote delay, an
approval today is positive but is mostly in the price, in our
view," Dirk Willer, head of emerging market strategy at Citi
Research, and Kenneth Lam, an emerging markets FX strategist,
wrote in a note.
    MSCI's index of Latin American stocks fell
0.3% as gains among the Brazilian shares on the index partially
softened the impact of losses seen in other countries, such as
Mexico.
    Yields on local 10-year Brazilian bonds dipped
to about 8.96% from 8.98% on Monday, while the real
traded about 0.6% weaker.
    Sao Paulo-traded stocks tacked on 1.1%, aided by
gains across the sectors.
    Common and preferred shares of state-run oil firm Petroleo
Brasileiro SA (Petrobras) rose 1.5% and
1.2%, respectively, aided by oil prices, which hit a
2019 peak earlier in the global day.
    Shares of miner Vale SA climbed 1%, in line with
a move seen in Itaú Unibanco. 
    A director of the bank said 2019 would be a strong year for
capital market activities, and that 8 percent to 11 percent
growth is expected in the lender's total credit portfolio.
    Mexican stocks slid 0.2% largely on losses among
financials and consumer staples. The peso softened 0.7%. 
    Analysts at CI Banco attributed the peso's weakness to the
dollar's broad-based strength, adding that they expected the
Mexican currency to trade in a range between 18.85 pesos and
19.05 pesos per dollar during the session.
    Mexico's seasonally adjusted unemployment rate was 3.6
percent in March, data showed.
    Chilean stocks slipped 0.2%, while the peso
 fell 0.6%, tracking lower prices of top Chilean export
copper.    
    Argentina's stocks benchmark rose 0.5%, while the
country's peso was little changed.
    Colombia's peso softened 0.7%, while local stocks
 ticked up 0.1%, with energy firm Ecopetrol SA
rising 0.5% on the back of higher oil prices. 
    
    Latin American stock indexes and currencies at 1434 GMT
    
 Stock indexes                                    daily %
                                      Latest       change
 MSCI Emerging Markets                  1087.57     -0.13
 MSCI LatAm                             2750.81     -0.31
 Brazil Bovespa                        95597.29      1.07
 Mexico IPC                            45277.87     -0.23
 Chile IPSA                             5223.20     -0.21
                                                 
 Argentina MerVal                      30944.66      0.51
 Colombia IGBC                         12994.31       0.1
                                                         
 Currencies                                       daily %
                                                   change
                                         Latest  
 Brazil real                             3.9618     -0.75
 Mexico peso                            18.9806     -0.82
 Chile peso                               668.6     -0.70
 Colombia peso                           3178.6     -0.78
 Peru sol                                  3.31     -0.18
 Argentina peso (interbank)             42.2800      0.57
                                                 
 


($1 = 3.9395 reais)

 (Reporting by Aaron Saldanha in Bengaluru
Additional reporting by Miguel Gutierrez
Editing by Paul Simao)
  
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