* Biggest drop in monthly US jobs report in 34 years

* Weak data spurs market rally on hopes for stimulus plan

* Mexico's Carstens says FX intervention will continue

By Daniel Bases

NEW YORK, Feb 6 (Reuters) - The shock waves of the grim
U.S. jobs report on Friday were felt throughout emerging
markets but the impact lifted asset prices rather than smash
them down as investors bet the U.S. would pass a massive
economic stimulus plan.

The plan now before the U.S. Senate, having already passed
the House of Representatives, is expected to come to a vote
later on Friday.

A moderate bloc of senators is trying to trim the $937
billion price tag. (For details click on [ID:nN05403943])

"The market moved up on the expectation of the stimulus
package being passed," said Rafael de la Fuente, emerging
markets analyst at BNP Paribas in New York.

Earlier on Friday, the U.S. employment report for January
showed 598,000 jobs were cut by employers, the biggest monthly
decline in 34 years. The unemployment rate rose to 7.6 percent.
Both figures were worse than expected.

Emerging market stocks, bonds and currencies all gained
ground, moving in tandem with a rally in U.S. equities.

MSCI's emerging markets stock index rose 4.23 percent
.MSCIEF while the Latin American stock index gained 5.69
percent .MILA00000PUS.

Investors dumped U.S. dollars as the safe-haven bid
evaporated on the hope the stimulus plan would help spur
economic growth and spill over into emerging markets, boosting
their currencies.

A third day of unannounced intervention by Mexico's central
bank also helped lift the peso against the U.S. dollar.

Finance Minister Agustin Carstens told investors in New
York that the central bank would continue to intervene in order
to contain the volatility of the peso, which hit a record low
against the greenback earlier this week.

Even as some market players argue the weak peso reflects
the grim prospects for Mexico's stumbling economy, Carstens
suggested the peso's recent volatility was due to speculators
abusing daily dollar auctions introduced last October.

"Interventions are tricky and this is a big test that so
far seems to be working. The market was learning how to play
the daily intervention method and the bank had to change its
strategy," said one Latin American analyst at a British bank in
New York.

"Eventually the central bank is going to run out of
ammunition. I think the peso will continue to trade weaker on
the bad economic data. Intervention won't change the trend,"
the analyst, who spoke on condition of anonymity, said.

The peso rose 0.35 percent to 14.2149 per U.S. dollar
MEX01MXN=.

Brazil's real rose 1.51 percent to 2.25 per U.S., a fourth
consecutive day of gains (BRBY: Quote, Profile, Research). Traders said transaction
volumes were low.

In the credit markets emerging sovereign debt yield spreads
over weaker U.S. Treasuries narrowed by 11 basis points to 634
basis points, according to the JP Morgan Emerging Markets Bond
Index Plus 11EMJ.JPMEMBIPLUS.
(Additional reporting by Walter Brandimarte and Herbert Lash
in New York; Lizbeth Salazar in Mexico City; Editing by Diane
Craft)