Bonds News

EMERGING MARKETS-Most Latam currencies edge lower amid trade worries

 (Updates prices)
    By Susan Mathew
    Sept 30 (Reuters) - Most Latin American currencies edged
lower as the dollar found favor amid uncertainty arising from
the U.S.-China trade war and as the euro fell following weak
growth data from Germany.
    Reports last week that U.S. President Donald Trump's
administration was considering delisting Chinese companies from
U.S. stock markets frayed investor nerves, even though they were
dismissed as wrong by Treasury officials.
    Mexico's peso fell 0.1% and Colombia's currency
 declined 0.6% with lower oil prices further pressuring
the crude exporters. Chile's peso also slid 0.4% as
prices of its main export, copper, fell.
    On the month, the Mexican peso gained about 1.7%, while the
latter two gave up more than 1% each. Analysts point to further
    "A range of October risks such as trade talks, tight USD
liquidity, relative monetary policy/growth differentials and EM
supply cause us to switch back to a bearish EMFX stance," said
Morgan Stanley analysts in a note. 
    Brazil's real fell marginally over the month but was
up 0.2% on Monday despite data showing national debt rose to
record high 79.8% of GDP in August, and central bank survey that
showed interest rate and exchange rate expectations for this
year have hit new lows.
    On Tuesday, the Brazilian Senate's Constitutional and Legal
Affairs Committee is to vote on amendments to the government's
landmark pension reform bill after postponing it last week.

    "We expect minor changes to the current text," wrote
Rabobank Brazil strategists Mauricio Oreng and Gabriel Santos.
The total expected federal savings for the next 10 years would
be kept at 870 million reais, they said.
    They expect Brazil's economy to be in a group of the more
resilient among emerging markets given its sound balance of
payments, muted inflation pressures and further advances in
budget reforms.
    Capping a volatile quarter for financial markets marked by
heightened trade tensions, political turmoil in Britain and Hong
Kong and a crash in Argentina's markets, an index of Latin
American currencies edged marginally lower on
the day, and marked its worst three months since June 2018.
    The Argentine peso, among the worst performers this
quarter, shed nearly a third of its value after President
Mauricio Macri's poor showing in the presidential primaries in
August. General elections in October will be a source of further
pressure for the currency. 
    The Brazilian real and the Colombian peso
followed with about 7% declines each on the quarter, while
Mexico's peso lost about 2.5% with the pending ratification of
its trade agreement with the United States and Canada being a
possible source of volatility. 
    Among stocks, those in Mexico and Argentina
rose on Monday tracking gains on Wall Street, while most other
Latam shares fell.
    Brazil stocks posted their sixth straight quarter of
gains, while Mexican shares edged 0.1% lower in the third
    Latin American stock indexes and currencies at 1921 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1001.38     -0.01
 MSCI LatAm                    2677.63     -0.32
 Brazil Bovespa              104905.36     -0.16
 Mexico IPC                   43111.98      0.59
 Chile IPSA                    5058.74      -0.8
 Argentina MerVal             28868.73     -0.03
 Colombia IGBC                12847.95     -0.34
       Currencies             Latest    Daily %
 Brazil real                    4.1498      0.13
 Mexico peso                   19.7364     -0.25
 Chile peso                      728.8     -0.40
 Colombia peso                 3476.75     -0.58
 Peru sol                        3.369      0.36
 Argentina peso                57.5900     -0.45
 (Reporting by Susan Mathew in Bengaluru; editing by Grant