Bonds News

EMERGING MARKETS-Latam FX, currencies jump on positive vaccine news

    * Mexican, Colombian pesos among top gainers
    * MSCI Latam stock index set for best day since mid-May
    * Peruvian sol lags amid impeachment proceedings

 (Updates prices throughout, adds comments)
    By Ambar Warrick and Shreyashi Sanyal
    Nov 9 (Reuters) - Most Latin American stocks and currencies
jumped on Monday as major progress in the development of a
COVID-19 vaccine and optimism stemming from Joe Biden's win in
the U.S. presidential election encouraged buying into
risk-driven assets. 
    Drugmakers Pfizer Inc and BioNTech SE said
the experimental vaccine was more than 90% effective in
preventing COVID-19 based on initial data from a large study,
sparking a rally across global markets on hopes a vaccine would
cement an economic recovery from the pandemic.
    Mexico's peso was among the biggest advancers among
Latin American currencies, rising more than 1%. The country has
been a high-profile sufferer of the Trump administration's hard
line on trade in last four years. 
    "A Biden win likely signifies a return to more predictable
trade and foreign policy. We believe emerging market assets
should perform on improved trade sentiment," Jean Boivin, head
of the BlackRock Investment Institute, wrote in a client note. 
    The U.S. dollar was subdued by the increased risk appetite,
enabling strong gains across most emerging market currencies,
with Colombia's peso adding about 2%.
    The Mexican and Colombian pesos were also supported by a
near 8% surge in oil prices on news of the vaccine and Saudi
Arabia's assurance that an OPEC+ oil output deal could be
adjusted to balance the market.
    "Risky assets are off to the races amid very positive
developments on a potential COVID vaccine, extending last week's
election-related gains," Ned Rumpeltin, European head of FX
strategy at TD Securities, wrote in a note. 
    "We think it is very hard to argue that markets have not
priced in a lot of good news over the last week or so. Whether
all of it is now baked into the cake is perhaps the most
relevant issue facing currency market investors right now." 
    Biden's victory in the U.S. presidential race had seen
markets starting the week on a high note, as investors bet on a
stabler U.S. trade policy with China, Europe and Latin America. 
    Brazil's real abandoned gains of over 2% early in the
session to trade lower as investors digested the outcome of the
U.S. vote. Analysts expect Biden to put Amazon deforestation and
human rights at the top of his agenda with Brazil.
    The country's stocks jumped 2.6%, outperforming 
    MSCI's index of emerging market stocks jumped
nearly 1.3% to its highest since March 2018. The Latin American
stock index jumped 4% and was set for its best
day in nearly six months.
    Peru's sol lagged its peers for the day, as 
President Martín Vizcarra faced an impeachment trial over
corruption allegations, familiar terrain for the centrist leader
who survived a previous vote to oust him in September and an
attempt to suspend him in 2019. 
    Argentina's major Buenos Aires province has extended an
already-delayed deadline to Dec. 4 for bondholders to agree a
deal to restructure some $7 billion in foreign debt.

    Key Latin American stock indexes and currencies:
            Stock indexes                    Latest   Daily %
 MSCI Emerging Markets                       1191.80     1.31
 MSCI LatAm                                  2088.06     4.02
 Brazil Bovespa                            103551.74      2.6
 Mexico IPC                                 39505.85     2.53
 Chile IPSA                                  3928.48     3.05
 Argentina MerVal                           49740.63    2.574
 Colombia COLCAP                             1208.13     3.05
               Currencies                    Latest   Daily %
 Brazil real                                  5.4031    -0.27
 Mexico peso                                 20.3435     0.99
 Chile peso                                    757.4    -0.69
 Colombia peso                               3647.08     2.02
 Peru sol                                     3.5808     0.28
 Argentina peso (interbank)                  79.3400    -0.30
 Argentina peso (parallel)                       147     6.80
 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru;
Editing by Krishna Chandra Eluri and Dan Grebler)