September 21, 2018 / 5:13 PM / 3 months ago

EMERGING MARKETS-Brazil markets up on election hopes; Argentine peso jumps

    By Bruno Federowski
    BRASILIA, Sept 21 (Reuters) - Brazilian markets rose on
Friday after an opinion poll suggested far-right lawmaker Jair
Bolsonaro would do well against his main rival in a likely
second-round vote in this year's presidential election.
    Bolsonaro has tapped University of Chicago-trained banker
Paulo Guedes as his main economic advisor, driving investors to
bet that he would act strongly to cut government spending and
curb growth of public debt. 
    Seeming contradictions between Guedes and Bolsonaro have
raised questions over the lawmaker's commitment to a
market-friendly reforms. Nevertheless, investors still prefer
him over leftist Fernando Haddad, who seems most likely to reach
the second round.
    A phone-based survey published by XP Investimentos showed
Bolsonaro remains in the lead in the first round but technically
tied with Haddad in the second round. Bolsonaro's rejection
rate, however, was smaller than that of Haddad's, running
contrary to other recent polls which have shown the opposite.
    Brazil's benchmark stock index jumped 2 percent,
leading gains in the region as blue-chips such as Vale SA
 and Petróleo Brasileiro SA rose.
    The Brazilian real firmed 0.9 percent to 4.04 to the
dollar - a one-month high - on a day when currencies from Mexico
, Colombia and Chile were either flat or
slightly higher.
    "The XP survey is making investors cheerful, but there is
little room for the currency to appreciate past 4.05," Miriam
Tavares, head of currency trading at AGK brokerage, said.
    The Argentine peso was the biggest gainer in
Latin American currency markets, rising nearly 2 percent even as
the central bank refrained from intervening.
    The peso has been driven higher this week by optimism that
the government will sign a revised standby financing deal with
the International Monetary Fund that will include stricter
fiscal measures.

    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                  Latest              
 MSCI Emerging Markets              1036.93     0.57   -10.49
 MSCI LatAm                         2509.66     0.32   -11.26
 Brazil Bovespa                    79713.55     2.05     4.33
 Mexico IPC                        49696.75     0.38     0.69
 Chile IPSA                         5421.35    -0.46    -0.46
 Argentina MerVal                  34217.88    -0.86    13.81
 Colombia IGBC                     12265.06     0.48     7.87
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         4.0350     0.89   -17.89
 Mexico peso                        18.8126     0.03     4.71
                                                      
 Chile peso                           664.1     0.47    -7.45
 Colombia peso                      3000.35     0.15    -0.61
 Peru sol                             3.289     0.21    -1.58
 Argentina peso (interbank)         37.5500     1.86   -50.47
                                                      
 Argentina peso (parallel)            38.25     1.31   -49.73
                                                      
 

 (Reporting by Bruno Federowski; 
Additional reporting by Claudia Violante in São Paulo
Editing by Alistair Bell)
  
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