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Bonds News

EMERGING MARKETS-Chilean peso touches two-month low, Latam peers subdued

    * Chilean peso lower before monetary policy move
    * Mexican peso reverses early declines 
    * Latam currencies index set for weekly declines 

 (Updates prices throughout)
    By Shreyashi Sanyal
    Oct 15 (Reuters) - Chile's peso hit its lowest level in
nearly two months on Thursday ahead of a monetary policy
decision by the central bank later in the day, while other Latin
American currencies were range bound as the dollar gained on
dwindling risk sentiment.   
    The Chilean peso fell 0.6%, extending its declines to
the fourth straight day, ahead of a policy decision by the
country's central bank at 5 p.m. ET, with analysts expecting the
benchmark rate to be left unchanged at 0.5%. 
    "We think that the bank will mention that the economic
recovery is ongoing, but that recent activity data was below
expectations due to weakness in the mining sector," said Alonso
Cervera, managing director of emerging markets economics
research at Credit Suisse.
    "We expect the bank to reiterate that it will maintain an
elevated monetary impulse for a 'prolonged period'."
    The MSCI's index for Latin American currencies
 fell 0.5%, in what is shaping up to be its first
weekly decline in three weeks. The halting of two high-profile
COVID-19 vaccine trials this week and the lack of more promising
economic data have investors avoiding riskier assets. 
    The dollar rose on signs the U.S. economy was
stalling while fiscal stimulus appeared unlikely before the U.S.
presidential election and on worries about new lockdowns in
major European countries where cases were spiking.
    Brazil's real fell 0.1% against the dollar,
but most declines were limited after a central bank indicator
showed domestic economic activity rose 1.06% in August.
 
    The country's central bank also said in a report on
financial stability that more Brazilian companies were likely to
file for bankruptcy protection by year-end.
    Mexico's peso rose 0.2% after central bank deputy
governor Jonathan Heath said the country's economy could
potentially see growth above 12% in the third quarter, based on
economic modeling. 
    Colombia's peso fell 0.3%, giving back gains made in
the previous session as the oil producer fell on weaker crude
prices.  
    The Argentine peso steadied after dropping on
Wednesday when President Alberto Fernandez said the country will
not devalue its currency or seize bank deposits despite a
financial crisis compounded by the COVID-19 pandemic.
 
    Latin American bourses followed Wall Street into the red,
with MSCI's index for Latam stocks falling 0.8%.

    Key Latin American stock indexes and currencies at 1935 GMT:
    
        Stock indexes                Latest   Daily %
                                              change
 MSCI Emerging Markets               1120.68    -1.31
 MSCI LatAm                          1913.82    -0.79
 Brazil Bovespa                     99298.81    -0.04
 Mexico IPC                         38034.02     0.02
 Chile IPSA                          3661.39    -0.08
 Argentina MerVal                   48009.69    1.511
 Colombia COLCAP                     1162.44    -0.76
                                                     
           Currencies                Latest   Daily %
                                              change
 Brazil real                          5.6082    -0.12
 Mexico peso                         21.3010     0.15
 Chile peso                            803.2    -0.60
 Colombia peso                       3848.25    -0.29
 Peru sol                             3.5807     0.25
 Argentina peso (interbank)          77.4700     0.01
                                              
 Argentina peso (parallel)               167     0.00
                                              
 
    
 

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by David
Gregorio and Andrea Ricci)
  
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