Bonds News

EMERGING MARKETS-Brazil stocks set for best quarter since 2003; Real down

    * Brazil's real down nearly 5% for Q2
    * Brazil stocks set to outperform broader EM in Q2
    * Broader Latam risk assets down for the day
    * Argentine peso among worst Q2 performers

    By Ambar Warrick
    June 30 (Reuters) - Brazil's real led losses among Latin
American currencies on Tuesday on a raft of weak data, while the
country's stocks were set for steep quarterly gains as investors
sought better returns in equities. 
    The real was down 1.3%, and set to lose nearly
5% for the second quarter of 2020. This came after its worst
quarterly loss in nearly 17 years.
    The currency, which was once considered a viable option for
carry trade, saw its standing slowly slip this year on continued
rate cuts by Brazil's central bank, as well as uncertainty over
the coronavirus pandemic.
    Conversely, Brazilian stocks were set to add 30% for
the quarter, their best performance since 2003, as they
recovered from sharp losses in the prior quarter. 
    The Bovespa index was set to outperform a 17% rise in its
broader emerging market peers for the quarter. 
    "The lower returns from sovereign fixed-income instruments
have forced investors out of their traditional comfort zone of
higher-yielding government bonds and into riskier assets, and
this has been a major factor in the resilient domestic equity
market in Brazil," wrote Wilson Ferrarezi, Brazil Economist at
TS Lombard. 
    For the day, stocks fell about 0.3% after data showed
Brazil's national debt and government deficit hitting record
highs in May. Separate data showed the country's unemployment
rate hitting a two-year high.
    Other Latin American risk assets also fell, as a spike in
coronavirus infections in the developed world raised concerns
over new curbs on social and business activity.
    Mexico's peso fell 0.5%, tracking weakness in oil
prices. Still, the currency was set to add about 2.3% for the
    Mexican stocks dropped about 0.5%, but were set for
their best quarter since 2011.
    Chilean stocks traded flat, while Colombian
equities shed 0.2% as both markets resumed trade after
a long weekend.
    Argentina's peso was among the worst quarterly
performers in Latin America, as investors continued to fret over
the country's negotiations with its sovereign debt holders.
    Key Latin American stock indexes and currencies: 
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets           995.33             0.14
 MSCI LatAm                     1867.90            -1.06
 Brazil Bovespa                95424.00            -0.33
 Mexico IPC                    37588.03            -0.48
 Chile IPSA                     3986.65            -0.11
 Argentina MerVal              39348.42           -2.381
 Colombia COLCAP                1109.05            -0.14 Currencies             Latest     Daily % change
 Brazil real                     5.4965            -1.32
 Mexico peso                    23.1705            -0.48
 Chile peso                       822.8            -0.41
 Colombia peso                  3758.65            -0.33
 Peru sol                        3.5347            -0.20
 Argentina peso                 70.4500            -0.07

 (Reporting by Ambar Warrick in Bengaluru; Editing by Sandra