July 4, 2019 / 7:49 PM / 4 months ago

EMERGING MARKETS-Pension reform prospects lift Brazil's real, stocks

 (Updates prices)
    By Susan Mathew
    July 4 (Reuters) - Brazil's currency and stocks rose on
Thursday after a congressional committee in charge of analyzing
the government's pension reform bill approved its main text. 
    The draft bill, which analysts say is critical to improving
Brazil's fiscal health and economy, could now be put to a lower
house plenary vote before recess on July 18.
    Brazil's real hit a more than three-month high, while
the Bovespa stock index surged 1.7% to life highs on
broad-based gains.
    The bill, designed to overhaul the country's bloated pension
system and result in savings of around 1 trillion reais ($264
billion) over 10 years, is seen as key in getting the sluggish
economy back on-track.
    "After approval in two voting sessions in the lower house,
the pension reform would move on to the Senate, where in our
view it should be approved by the end of September or beginning
of October," Credit Suisse analysts wrote in a note.
    "We believe that risks of additional dilution of the total
fiscal savings in the Senate are very low," they added. 
    Brazil markets have been volatile as the bill makes its way
through congress. 
    Against a steady dollar, most other regional currencies were
flat to higher. Chile's peso, however, slipped 0.2% as
prices of its main export, copper, fell.
    Stocks in the region, besides those in Brazil, fell between
0.04% and 0.2% after most made strong gains in last session on a
Wall Street rally spurred by hopes that the Federal Reserve will
cut interest rates.
    U.S. stock markets were closed on Thursday for the July
Fourth holiday.
    Investors are looking out for U.S. June non-farm payrolls
data for further clues on the Fed's possible policy signal from
its July meeting. 
        
    Key Latin American stock indexes and currencies at 1930 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1064.46      0.46
                                        
 MSCI LatAm                    2919.63      1.84
                                        
 Brazil Bovespa              103719.90      1.71
                                        
 Mexico IPC                   43467.21     -0.04
                                        
 Chile IPSA                    5046.12     -0.17
                                        
 Argentina MerVal             41253.43     -0.12
                                        
 Colombia IGBC                12706.17     -0.21
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.7959      0.79
                                        
 Mexico peso                   19.0050      0.03
                                        
 Chile peso                        679     -0.18
                                        
 Colombia peso                 3189.25      0.18
 Peru sol                        3.291      0.00
                                        
 Argentina peso                41.5000      1.31
 (interbank)                            
                                        
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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