January 2, 2020 / 7:51 PM / 21 days ago

EMERGING MARKETS-Brazil stocks bring in 2020 at all-time high; most Latam FX up

 (Updates prices)
    * Trump says trade deal with China to be signed Jan.15
    * Investors cheer China banks cutting reserve ratios
    * Mexico manufacturing sector fell to new series low in
December
    * Chile economic activity declines in November

    By Susan Mathew
    Jan 2 (Reuters) - Brazil stocks jumped 2% on Thursday to
begin 2020 scaling new highs and most currencies in Latin
America also rallied despite a strong dollar as trade optimism
and policy easing by China lifted global sentiment.
    After logging a 13% rise in 2019, MSCI's index for Latin
American stocks broke a three day losing streak
helped by a 1.6% rise in Mexican shares and a near 3%
surge in Chile stocks. 
    The upbeat mood was brought on by U.S. President Donald
Trump's announcement on Tuesday that the so-called Phase 1 of a
trade deal with China would be signed on Jan. 15, as well as a
Chinese central bank move to boost a slowing economy. China is a
major destination for Latin America's commodity exports.

    The People's Bank of China said it was reducing the cash
that banks must hold as reserves, in its eighth such cut since
early 2018, to give banks more money to lend.
    "Chinese stimulus will assure 6% growth and the bull case
for the global equity rebound should remain firmly in place,"
said Edward Moya, senior market analyst at OANDA New York.
    Iron ore miner Vale was one of the major drivers
on Sao Paulo's commodity-heavy Bovespa index, while the
biggest boost came from financial exchange operator B3
, which rose nearly 5% after announcing reduced and
simplified trading fees.
    Brazil's real, however, reversed early gains and
lagged regional peers against a strong dollar. A survey on
Thursday showed growth in Brazil's manufacturing sector almost
completely evaporated in December.
    Other major Latam currencies firmed between 0.2% and 0.9%.
Chile's peso turned around session losses. 
    Chile's economic activity dropped in November, the central
bank said, led by a decline in mining activity, as the impact of
nearly two months of protests began to register in the world's
top copper producer.    
    But strategists at Citi Research said activity fell less
than their expectations and improved on a month-on-month
seasonally adjusted basis.
    "The improvement likely continued in December as protests
calmed down. The magnitude of this reversal will be key to
assess the activity outlook into 2020," Citi Research said.
    In Mexico, investors shrugged of minutes of the central
bank's December meeting that said a recently announced minimum
wage hike could fan inflation as well as data that showed
activity in Mexico's manufacturing sector fell to a new series
low in December.

    Latin American stock indexes and currencies at 1930 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1127.14      1.12
                                        
 MSCI LatAm                    2972.77      1.89
                                        
 Brazil Bovespa              117990.70      2.03
                                        
 Mexico IPC                   44252.11      1.63
                                        
 Chile IPSA                    4804.92      2.89
                                        
 Argentina MerVal             40999.29    -1.613
                                        
 Colombia COLCAP               1651.23     -0.67
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.0249     -0.32
                                        
 Mexico peso                   18.8556      0.37
                                        
 Chile peso                     749.47      0.23
                                        
 Colombia peso                    3249      1.12
 Peru sol                        3.299      0.39
                                        
 Argentina peso                59.8150      0.16
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; editing by Grant
McCool)
  
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