September 21, 2018 / 8:43 PM / 3 months ago

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

 (Updates prices)
    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, leading 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
market-friendly changes. Nevertheless, investors generally still
prefer him over leftist Fernando Haddad, who seems most likely
to face off against Bolsonaro in the second round.
    A phone-based survey published by XP Investimentos showed
Bolsonaro remains in the lead for the first round and
technically tied with Haddad in a second. Bolsonaro's rejection
rate, however, was smaller than Haddad's, running contrary to
other recent polls which have shown the opposite.
    Brazil's benchmark stock index was up 1.6 percent in
afternoon trading, leading gains in the region.
    The Brazilian real firmed 0.74 percent 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 3.1 percent.
    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.
    In Mexico, the benchmark stock index was down 0.38 percent
and the peso was flat amid mounting pessimism about the future
of the North American Trade Agreement, as the United States and
Canada struggle to reach a deal.
    
    Key Latin American stock indexes and currencies at 1938 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                  Latest              
 MSCI Emerging Markets              1051.68     1.42   -10.49
 MSCI LatAm                         2559.86        2   -11.26
 Brazil Bovespa                    79367.96      1.6     3.88
 Mexico IPC                        49321.54    -0.38    -0.07
 Argentina MerVal                  34296.84    -0.63    14.07
 Colombia IGBC                     12240.33     0.28     7.65
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         4.0410     0.74   -18.01
 Mexico peso                        18.8090     0.02     4.73
                                                      
   Chile peso                         665.7     0.23    -7.67
 Colombia peso                         2998     0.23    -0.53
 Peru sol                             3.293     0.09    -1.70
 Argentina peso (interbank)         37.1000     3.10   -49.87
                                                      
 Argentina peso (parallel)               38     1.97   -49.39
                                                      
 

 (Reporting by Bruno Federowski; 
Additional reporting by Claudia Violante in São Paulo
Editing by Alistair Bell and Rosalba O'Brien)
  
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