Bonds News

EMERGING MARKETS-Chile's peso firms on fiscal aid plan, Brazil's real skids 1%

 (New throughout, updates prices, market activity and comments)
    By Sagarika Jaisinghani and Susan Mathew
    Sept 28 (Reuters) - The Chilean peso rose on Monday as
President Sebastian Pinera launched a $2 billion fiscal aid
program, while the Brazilian real tumbled 1% to extend a
three-week losing streak.
    Chile's peso firmed 0.4% against a weaker dollar a
day after Pinera said the subsidies would be aimed at creating
new jobs or recovering those lost during coronavirus-driven
    The currency has recovered sharply from its March lows, but
remains about 4% down on the year as the pandemic hammered
Chile's commerce, services and tourism sectors and drove
unemployment to over 13%, its highest in a decade.
    The peso has far outperformed Brazil's real, which
plumbed new lows in 2020 despite a constitutional reform bill
aimed at simplifying and reducing the cost of the public sector
of Latin America's biggest economy.
    The real fell 1.5% on Monday. Analysts at JPMorgan said the
currency could outperform its peers "even if (constitutional
reform) approvals take longer than some expect."
    "That said, the recent sell-off in risky assets amid
increasing volatility and the fact that BRL is a high beta to
these sort of events makes us wary and we stay neutral for the
time being," said JPMorgan strategist Saad Siddiqui.
    The Mexican peso slipped 0.4% even as the
unemployment rate eased to 5.2% in August from 5.4% in July.
Last week, the central bank lowered interest rates for the 11th
time since August 2019.
    "August data will start to make more apparent that the pace
of economic recovery will be slow," said Alonso Cervera,
managing director of emerging markets economics research at
Credit Suisse.
    "We will be watchful of imports' performance as we project
domestic consumption and investment will take longer to improve
than external demand."
    As oil prices rose, crude exporter Colombia's peso
firmed 0.4% after its biggest weekly decline since mid-June.

    The Argentine peso closed down 0.3% at a record low
of 76.06 per dollar with companies struggling to keep up with
payments on dollar debt, hiking the risk of corporate defaults
after the central bank tightened access to foreign currency to
stem a sharp decline in reserves.
    Buenos Aires' main stock index was up 0.1%, on
course to gain for a fifth straight session.
    Most other Latam bourses rose, with Mexican shares
hitting four-week highs. Brazil's Bovespa index,
however, hit a near three-month low on broad based losses led by
consumer stocks. 
    Latin American stock indexes and currencies 1932 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets    1070.60     1.09
 MSCI LatAm               1824.97    -1.43
 Brazil Bovespa          95320.25    -1.73
 Mexico IPC              37270.96     1.88
 Chile IPSA               3594.65     0.16
 Argentina MerVal        42101.57    0.141
 Colombia COLCAP          1185.59     1.22
      Currencies          Latest   Daily %
 Brazil real               5.6399    -1.54
 Mexico peso              22.4410    -0.45
 Chile peso                 784.2     0.36
 Colombia peso            3871.25     0.36
 Peru sol                  3.5887    -0.08
 Argentina peso           76.0500    -0.26
 (Reporting by Sagarika Jaisinghani in Bengaluru; additional
reporting by Luana Maria Benedito; editing by Grant McCool and
David Gregorio)