Bonds News

EMERGING MARKETS-Colombian peso falls from one-month high after recent oil weakness

    * Colombian peso hit by weakness in oil prices
    * Latam, Caribbean economies to remain in COVID grip -IMF
    * Argentina August economic activity down 11.6% year-on-year

 (Updates prices throughout; adds background, bullets)
    By Shreyashi Sanyal
    Oct 22 (Reuters) - Colombia's peso fell for the first time
in five days on Thursday as the oil exporter's currency took a
hit from recent weakness in crude prices, while Brazil's real
firmed the most among Latin American currencies amid optimism
over its economic recovery.  
    The peso slipped from a one-month high to fall 0.3%
against the dollar as oil prices struggled to stay afloat after
higher U.S. gasoline inventories signaled a deteriorating demand
    Colombia recently approved a 314 trillion peso ($81.7
billion) budget for next year, which is the country's biggest
ever and 8.3% higher than this year's, but analysts call it a
relatively austere sum for 2021. 
    Economists at Capital Economics note, "the rebound in demand
will be held back by limited fiscal support from the government
and low oil prices."  
    The International Monetary Fund said in a report that next
year's rebound from a sharp, 8.1% contraction in Latin American
and Caribbean economies in 2020 will be partial and uneven, with
output not catching up for years and tourism-dependent countries
seen struggling the most.    
    Brazil's real firmed 0.4% as investors
remained hopeful of the pace at which the country's economy is
recovering. Latest figures have shown a rebound in retail sales,
manufacturing, industrial production and international trade.
    Latin America's biggest economy also benefited from a pickup
in demand in China, its biggest export hub for agricultural
    However, the country's public finances remain a major
sticking point for business confidence as investors raise doubts
about the government's ability to fund a new fiscal package. 
    "The scenario for the public accounts for the next few years
is increasingly challenging, as the government is showing a
desire to continue to increase spending next year," said Solange
Srour, Brazil chief economist at Credit Suisse.
    Brazil's government early next month will revise its 2020
gross domestic product forecast, currently a contraction of
4.7%, special secretary at the economy ministry Waldery
Rodrigues said. 
    Mexican annual inflation quickened faster than expected in
the first two weeks of October, pushing the rate above the
central bank's tolerance threshold, figures from the national
statistics office (INEGI) showed. The Mexican peso rose
    Chile's peso rose, while Argentina's peso
    Argentina's August economic activity dropped 11.6%, the
country's statistics agency said, shallower than the decline a
month earlier in July but slightly worse than analyst forecasts.

    The MSCI's index for Latin American equities
gained 1.1%, supported by a rise in Sao Paulo stocks. 
    Shares in Brazilian motor maker WEG SA were up
3%after the company reported a 54% rise in third-quarter profit
on Wednesday, as it saw demand for equipment grow.     
    Key Latin American stock indexes and currencies at 2000 GMT:
          Stock indexes                  Latest   Daily %
 MSCI Emerging Markets                   1135.49    -0.21
 MSCI LatAm                              1976.92     1.07
 Brazil Bovespa                        101937.12     1.38
 Mexico IPC                             38563.40    -0.27
 Chile IPSA                              3811.29     0.76
 Argentina MerVal                       51482.15    2.782
 Colombia COLCAP                         1177.89        0
             Currencies                  Latest   Daily %
 Brazil real                              5.5930    -0.01
 Mexico peso                             20.9911     0.51
 Chile peso                                778.9     0.44
 Colombia peso                              3782    -0.46
 Peru sol                                 3.6017    -0.14
 Argentina peso (interbank)              78.0600    -0.40
 Argentina peso (parallel)                   186    -1.61
 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis)