June 27, 2019 / 2:19 PM / 24 days ago

EMERGING MARKETS-Brazil's real, stocks weaken on pension reform concerns

    June 27 (Reuters) - Brazil's real weakened on Thursday, hit
by concerns about the passage of the country's pension reform
bill and economic growth, while uncertainty ahead of U.S.-China
talks at the G20 summit hindered gains in other Latin American
currencies.
    The real fell about 0.6% to hit a weekly low against
the dollar after a Brazilian special congressional pension
committee canceled a meeting that would have given its verdict
on the government's signature bill, a legislative aide said.

    The move makes it more difficult to put the bill to a
plenary vote before parliament breaks for recess on July 18,
further delaying the much-needed reforms to revive economic
growth.
    Adding to woes, Brazil's central bank slashed its 2019
economic growth forecast to 0.8% from 2.0% and said growth is
likely to be lower than previously expected through
2021.
    Sao Paulo-listed shares fell 0.8%, with banking
stocks such as Itau Unibanco Holding and Banco
Bradesco, sensitive to news on pension reforms,
leading declines.
    The biggest gainer was Grupo Pao de Acucar, which
jumped over 10% after its parent French retailer Casino
 announced a restructuring plan for the Brazilian
subsidiary.
    The Mexican peso and other currencies in the region 
edged lower amid uncertainty about trade talks between the U.S.
and Chinese leaders at the G20 Summit.

    Mexico's central bank is expected to hold its benchmark
interest rate steady at 8.25%, according to a Reuters poll, as 
annual inflation slowed this month despite signs of weakness in
the economy. Banxico will publish its monetary policy statement
on Thursday at 1 p.m. local time (1800 GMT).
    "While growth keeps disappointing and inflation converges
slowly towards Banxico's inflation target, the lack of clarity
regarding Pemex's business plan will likely keep Banxico on the
sidelines and wait for further confirmation of core inflation
easing," Morgan Stanley analysts wrote in a note.
    The peso has been hit hard by concerns about trade with the
United States and well as credit rating downgrade on the
debt-laden state oil company Pemex.  
    
    Latin American stock indexes and currencies at 1400 GMT
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1053.82     0.56
                                     
 MSCI LatAm                 2808.46    -1.22
                                     
 Brazil Bovespa            99628.25    -1.05
                                     
 Mexico IPC                43612.54    -0.41
                                     
 Chile IPSA                      -         -
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC             12679.14     0.59
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.8711    -0.64
                                     
 Mexico peso                19.1700    -0.23
                                     
 Chile peso                   678.9     0.01
                                     
 Colombia peso               3194.2    -0.40
                                     
 Peru sol                         -        -
                                     
 Argentina peso             42.7500    -0.43
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru; Editing by Cynthia
Osterman)
  
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