Bonds News

EMERGING MARKETS-Brazil's real hovers near one-month high, Wall St slide hits stocks

    * Economic data spurs recovery hopes in Brazil
    * Wall St sinks as tech sell-off resumes
    * LatAm FX index set for second straight weekly gain
    * Brazil stock index tracks first weekly decline in three

    By Sagarika Jaisinghani
    Sept 4 (Reuters) - The Brazilian real hovered at one-month
highs on Friday as investors bet on a steady economic recovery
after a slate of upbeat data this week, while a tumble on Wall
Street for a second straight day hit Latin American equities.
    The real rose as much as 0.9% to 5.2460 a dollar, a
day after data showed private sector economic activity rose in
August at its fastest pace in over seven years. Figures on
Friday showed new auto sales rose 5.1%, the latest in a series
of data to signal a pickup in business activity.
    Brazil's government on Thursday presented to congress a
constitutional reform bill aimed at simplifying and reducing the
cost of its public sector, which gives the president sweeping
powers to eliminate public sector jobs and bodies without
congressional approval.
    "The actual positive effect of this reform on public
finances is very limited but from the market's point of view it
is of symbolic importance," said You-Na Park-Heger, FX analyst
at Commerzbank.
    "We remain cautious, though, and do not bank on a continued
BRL recovery. The country continues to be badly affected by the
pandemic and the uncertainty in connection with the economic
recovery remains high."
    An index of Latin American currencies edged
higher and was on course for a second straight week of gains,
also helped by earlier weakness in the dollar following the U.S.
Federal Reserve's accommodative stance on inflation.
    The Mexican peso firmed 0.2% as a consumer confidence
index rose for the third month in a row in August. The currency
has dropped 12% in 2020 and is set for its worst year since 2016
as the COVID-19 pandemic battered Latin America's no. 2 economy,
forcing factories to shut and hitting trade.
    A Reuters poll found FX strategists think most major
emerging market currencies will hold gains made since March's
financial market crash into next year. In twelve months, they
expect South Africa's rand will have gained about 2.0%,
the Brazilian real 7.0% and the Russian rouble 8.0%.

    Elsewhere in Latin America, the Chilean peso firmed
0.3%, while the Colombian peso and Peruvian sol
eased 0.4% and 0.2%, respectively.
    Among stocks, the Brazilian stock index shed 1.4%
and was set for its first weekly decline in three. Bourses in
Chile, Mexico and Argentina fell more
than 1%, taking a basket of Latin American stocks
 down 1.6%.
    On Wall Street, the Nasdaq fell as much as 5% for a
second straight day as investors sold off heavyweight tech
stocks that have been largely responsible for a stunning rally
in U.S. equities since April.
    Key Latin American stock indexes and currencies:     
     Stock indexes              Latest    Daily % change
 MSCI Emerging Markets           1091.89            -1.53
 MSCI LatAm                      1970.66            -1.56
 Brazil Bovespa                 99230.11            -1.48
 Mexico IPC                     35946.38            -1.33
 Chile SPIPSA                    3797.46            -1.26
 Argentina MerVal               43946.40           -1.905
 Colombia Colcap                 1240.68            -0.49 Currencies              Latest    Daily % change
 Brazil real                      5.2988            -0.18
 Mexico peso                     21.6485             0.05
 Chile peso                          773             0.25
 Colombia peso                   3706.03            -0.47
 Peru sol                         3.5568            -0.20
 Argentina peso (interbank)      74.4300            -0.07

 (Reporting by Sagarika Jaisinghani in Bengaluru
Editing by Chris Reese)