November 9, 2017 / 10:40 PM / a year ago

EMERGING MARKETS-Mexico peso up on wary central bank, Brazil stocks fall

 (Recasts with peso gains)
    By Miguel Gutierrez
    SAO PAULO, Nov 9 (Reuters) - Mexico's peso gained on
Thursday after the central bank signaled it would not cut
interest rates anytime soon after a recent currency slump
threatens to fan inflation while Brazilian stocks fell after a
batch of weak corporate reports.
    Mexico's peso firmed nearly 0.3 percent after the central
bank said that the inflation outlook had worsened and that it
would maintain a prudent monetary policy given the risks Latin
America's No. 2 economy is facing.
    The peso was battered last month to its weakest level since
March on concerns that U.S. President Donald Trump could pull
out of the North American Free Trade Agreement (NAFTA) with
Mexico and Canada. 
    "[The central bank board] is very worried about the
potential impact on the currency from uncertainty around NAFTA
talks," said Banorte analyst Alejandro Cervantes.
    The benchmark Bovespa stock index fell over 1.9
percent after rising the most in a month on Wednesday.
    Shares of fuel distributor Ultrapar Participações SA
 fell after slightly weaker-than-expected
third-quarter operating profits fueled doubt over its year-end
    Lender Banco do Brasil SA and petrochemical
company Braskem SA also dropped in the wake of
quarterly earnings figures.
    The move came in a week of heightened volatility as
uncertainty grew over President Michel Temer's efforts to
streamline the social security system.
    Lawmakers seem increasingly unwilling to support Temer's
austerity efforts, which contributed to driving his approval
rates to single digits. Investors see the pension reform as key
to curbing growth of public debt and stimulating the economy.

    Key Latin American stock indexes and currencies at 2215 GMT:
 Stock indexes                                 daily %    YTD %
                                      Latest    change   change
 MSCI Emerging Markets                1133.30    -0.12    31.59
 MSCI LatAm                           2790.14    -1.11    20.54
 Brazil Bovespa                      72930.69    -1.93    21.09
 Mexico IPC                          48713.51    -0.25     6.73
 Chile IPSA                           5443.89    -0.76    31.13
 Chile IGPA                          27398.65    -0.71    32.14
 Argentina MerVal                    27951.54    -0.46    65.22
 Colombia IGBC                       10806.63     0.74     6.70
 Venezuela IBC                         685.51    -2.56   -97.84
 Currencies                                    daily %    YTD %
                                                change   change
 Brazil real                           3.2589     0.13    -0.09
 Mexico peso                          19.0350     0.28     8.98
 Chile peso                            629.85     0.23     6.49
 Colombia peso                           3009     0.30    -0.25
 Peru sol                               3.241     0.12     5.34
 Argentina peso (interbank)           17.5025     0.13    -9.30
 Argentina peso (parallel)               17.9     0.00    -6.03
 (Additional reporting by Bruno Federowski in Sao Paulo; editing
by Diane Craft)
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