Bonds News

EMERGING MARKETS-Brazilian intervenes as real slumps; Colombian peso drops on tax reform

    * Real cuts losses after two central bank interventions
    * Colombia announces changes in tax reform
    * Latin American stocks eye worst day in three months

 (Updates prices; adds details, news items)
    By Medha Singh and Uday Sampath Kumar
    Nov 26 (Reuters) - Brazil's real slipped in volatile trading
on Tuesday to a fresh record low, with the government
intervening twice to stymie a slump in the currency, while a
change in Colombia's tax reform raised worries of higher fiscal
    The Brazilian central bank said it is selling dollars in the
spot currency market for the second time, announcing an auction
of another minimum lot $1 million after the real slumped as much
as 1.2% to 4.2770 against the dollar.
    While the currency hit a record low last week after foreign
bidders effectively failed to show up at a "mega" oil auction
this month, a fresh wave of selling on Tuesday followed comments
from Economy Minister Paulo Guedes that he was not worried about
the currency's weakness.
    "The markets understood that as a sign that further
depreciation is not considered a threat by the government," said
Wilson Ferrarezi, an economist at TS Lombard in Sao Paulo.
    "The current level near 4.30 does not seem to be justified
when we look at the fundamentals."    
    In Colombia, the peso shed 1.1% as President Ivan
Duque announced changes to his unpopular tax reform proposal
which would cost the government some 3.2 trillion pesos ($931
    Duque said the proposal will be modified to return value
added tax (VAT) to the poorest 20% of Colombians and lower
contributions to healthcare by minimum wage pensioners.

    "The VAT rebate poses a risk to Colombia's fiscal stance,"
Christian Lawrence, Senior Market Strategist, LatAm FX at
Rabobank in New York said.
    "Any sort of major announcement like this is going to spark
some worries, particularly when it seemed to come out of the
    Still, Colombian unions and student groups planned a seventh
day of anti-government protest on Wednesday.
    Mexico's peso continued to weaken after revised data
on Monday showed Latin America's second largest economy was in a
technical recession in the first half of the year. 
    The government said on Tuesday it would spend 859 billion
pesos ($44.3 billion) in the first phase of an ambitious
infrastructure plan underwritten by the private sector, to prop
up the stagnating economy.
    The broader sentiment was also dented by caution around the
ongoing U.S.-China trade talks. The region's stocks
 lost about 2%, set for their steepest fall in
three months.   
 ($1 = 19.3710 Mexican pesos)
 ($1 = 3,433.94 Colombian pesos)

    Key Latin American stock indexes and currencies at 1933 GMT:
 Stock indexes                                 daily %
                                 Latest         change
 MSCI Emerging Markets               1047.80     -0.54
 MSCI LatAm                          2632.63     -2.05
 Brazil Bovespa                    106963.12     -1.35
 Mexico IPC                         42996.52     -1.24
 Chile IPSA                          4563.00     -1.91
 Argentina MerVal                   32101.30     -4.16
 Colombia IGBC                       1588.00      -0.8 Currencies                                    daily %
 Brazil real                          4.2460     -0.75
 Mexico peso                         19.5640     -0.64
 Chile peso                            797.8     -0.81
 Colombia peso                       3474.85     -1.23
 Peru sol                              3.384      0.06
 Argentina peso (interbank)          59.9000     -0.31
 (Reporting by Medha Singh and Uday Sampath in Bengaluru;
Editing by Richard Chang)