September 25, 2019 / 8:28 PM / 23 days ago

EMERGING MARKETS-Mexico falls on USMCA worries, Wall St recovery buoys some Latam stocks

 (Adds details on USMCA, fresh comment, updates prices)
    By Susan Mathew
    Sept 25 (Reuters) - Worries that Mexico's trade deal with
Canada and the United States may get derailed weighed on
Mexico's stocks and the peso currency on Wednesday, while a
strong dollar kept most other Latin American currencies
pressured.
    Mexico's peso fell 0.5% for its worst day in nearly a
month, while the main stock index extended losses to a
third day and touched a two week low.
    U.S. President Donald Trump warned that an impeachment
inquiry against him could derail congressional approval of the
U.S-Mexico-Canada trade agreement (USMCA), a trillion-dollar
deal signed by the three nations last year to replace the North
American Free Trade Agreement (NAFTA).
    Amid calls by leaders of Mexico and Canada urging the United
States to ratify the deal, U.S. Trade Representative Robert
Lighthizer said he was confident the deal would come up for a
vote and pass. 
    "USMCA is on life support," said James Lucier, an analyst
with Capital Alpha Partners. The firm has lowered its estimated
likelihood of passage for the USMCA to 30%. 
    Broader sentiment, meanwhile, remained fragile.
    A recovery in U.S. stocks after Trump said a trade deal with
China could happen sooner than expected, helped most regional
stocks erase early losses and turn positive. 
    After he toughened his trade rhetoric with China on Tuesday,
Trump on Wednesday said a deal to end a nearly 15-month trade
war with China could happen sooner than people think and that
the Chinese were making big agricultural purchases from the
United States. 
    Shares in Argentina rose for the first time in four
sessions, up 1.4%, while those in Brazil climbed half a
percent. 
    Currencies in Brazil and Colombia also eked
out gains.
    But uncertainty around an impeachment investigation against
Trump and persistent fears of slowing global growth saw
investors move to safer assets such as the dollar, which in turn
pressured most Latin American currencies. 
    Those of Chile, Argentina and Peru fell
between 0.2% and 0.6%
    
    Key Latin American stock indexes and currencies at 1956 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1006.06     -0.52
                                        
 MSCI LatAm                    2673.11      0.49
                                        
 Brazil Bovespa              104347.81      0.45
                                        
 Mexico IPC                   42917.69     -0.42
                                        
 Chile IPSA                    5006.24      0.11
                                        
 Argentina MerVal             28196.91     1.356
                                        
 Colombia IGBC                12912.13      -0.3
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.1527      0.39
                                        
 Mexico peso                   19.5514     -0.57
                                        
 Chile peso                      727.4     -0.60
                                        
 Colombia peso                 3428.75      0.15
 Peru sol                         3.35     -0.27
                                        
 Argentina peso                57.0550     -0.27
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Sandra
Maler)
  
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