January 31, 2019 / 1:46 PM / 18 days ago

EMERGING MARKETS-Dovish Fed lights up Latam FX; Brazil stocks at record-high

    * Bovespa crosses the 98,000 mark 
    * Chilean peso on track to post best month since Jan 2012
    * Brazil's real at three-month high 

    By Agamoni Ghosh
    Jan 31 (Reuters) - Latin American currencies lit up on
Thursday as the dollar weakened after the U.S. Federal Reserve
left borrowing costs unchanged and signaled a dovish tone for
future hikes, while Brazil stocks set another record high,
continuing their bull run this year.    
    The Fed signaled its three-year-drive to tighten monetary
policy may be at an end amid a cloudy outlook for the U.S.
economy due to global headwinds and impasses over trade and
government budget negotiations.
    "The Fed provided a big boost but how much more help can it
provide to EM assets?" said Morgan Stanley analysts in a note.  
    "A lot is now in the price. We stay bullish on EM for now
and look for good news on a trade deal as the next catalyst,"
the note added.
    Brazil's real jumped to a three-month high, on track
to end the month higher, buoyed by market optimism towards
pension reforms promised by the government of President Jair
Bolsonaro.  
    Chile's peso was on track to post its best monthly
gains since January 2012 after central bank policymakers decided
unanimously on Wednesday to raise the benchmark interest rate by
25 basis points, in line with market expectations.
    Mexico's peso climbed 0.4 percent, recovering from a
sharp fall in the previous session as a Fitch downgrade of state
oil firm Pemex left questions over the sovereign debt rating of
the country.
    Brazil's benchmark Bovespa index scaled a new record
high on the day, led by Brazil's second largest private lender
Banco Bradesco, which jumped after the company beat
Q4 profit estimates on lower loan-loss provisions.
    Disaster-tainted miner Vale rose about 1 percent,
with shares cautiously on recovery track after their worst fall
in history on Monday.
    Brazil's Minas Gerais state labor prosecutors' office said
on Thursday it had frozen more than 800 million reais ($219
million) of Vale's funds as compensation for victims of last
week's deadly tailings dam burst.
    Stocks in Chile rose for the first time in
three days, buoyed by global equities which registered their
best January on record after soothing sounds from the Fed.
 
    
  Key Latin American stock indexes and currencies at 1315 GMT

 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1049.14      1.21
                                          
 MSCI LatAm                      2938.54      2.04
                                          
 Brazil Bovespa                 98073.94      1.11
                                          
 Mexico IPC                            -         -
                                          
 Chile IPSA                      5418.19      0.55
                                          
 Argentina MerVal                      -         -
                                          
 Colombia IGBC                         -         -
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.6569      0.73
                                          
 Mexico peso                     19.0532      0.44
                                          
 Chile peso                       659.55      0.60
                                          
 Colombia peso                         -         -
 Peru sol                              -         -
                                          
 Argentina peso (interbank)            -         -
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Frances Kerry)
  
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