Bonds News

EMERGING MARKETS-Latam FX sapped by firm dollar on virus woes, Mexican peso hits one-month low

    * Brazil's real, Mexican peso fall over 1%
    * UBS AM says Latam FX 'particularly attractive'
    * Brazil's car buyer Localiza surges on deal to buy rival

    By Medha Singh
    Sept 23 (Reuters) - Latin American currencies resumed their
slide on Wednesday, with the Mexican peso and Brazilian real
hitting one-month lows against a perky dollar amid renewed fears
over the fragile global economy's fate in the face of rising
coronavirus cases.
    Both the Mexican peso and Brazilian real
 shed over 1%, down for the fourth straight session.
    MSCI's index for Latin American currencies
dropped about 2% after taking a breather on Tuesday from a dire
start to the week on concerns over another round of
pandemic-related business shutdowns in some European countries.
    An emergency approval of one to three COVID-19 vaccines is
likely in the coming months, UBS Asset Management predicted on
Wednesday, adding that the approval would catalyze a U.S. dollar
weakness and help higher-beta emerging market currencies
meaningfully outperform.
    The asset management arm of the Swiss bank said it prefers
equity markets outside of the U.S. and that Latin America
currencies stood out as "particularly attractive".
    Focus this week is on Mexico's central bank policy statement
on Thursday where the pace of interest rate cuts is expected to
    Meanwhile, markets are divided over whether the Colombian
central bank will continue to trim its benchmark interest rate
or halt cuts to stem capital outflows, a Reuters poll showed.
    Interest rates are likely to remain at low levels in Brazil,
Chile, Colombia, Mexico and Peru, and not return to the previous
cycle's high point in the next two years or so, regardless of an
economic recovery's trajectory, Moody's Investors Service said.
    The Argentine peso logged another all-time low
against the dollar amid concerns over economic recovery
following the central bank's steps to tighten currency controls
and restrict already limited access to dollars last week.
    Argentine Economy Minister Martin Guzman in comments made
before Congress on Tuesday stood by the country's newly adopted
currency controls.
    Stocks in Latin America were mixed with Mexican shares
edging 0.2% higher, Brazil's Bovespa down 0.3% while those in
Chile shedding 1.3%. 
    Among individual stocks, Brazilian rent-a-car company
Localiza stood out with its 12% jump as it agreed to
take over rival Unidas for roughly 12 billion reais
($2.18 billion), creating a behemoth that could account for more
than 10% of all cars sold in Brazil.
    Unidas shares soared over 17%.

    Key Latin American stock indexes and currencies at 1430 GMT:
 Stock indexes                                 daily % change
 MSCI Emerging Markets                1079.47            -0.3
 MSCI LatAm                           1848.63             2.7
 Brazil Bovespa                      97050.38           -0.25
 Mexico IPC                          35914.47            0.17
 Chile IPSA                           3586.09           -1.34
 Argentina MerVal                    41133.85           0.462
 Colombia IGBC                        1187.79            0.01
 Currencies                                    daily % change
 Brazil real                           5.5407           -1.32
 Mexico peso                          22.0910           -1.67
 Chile peso                             781.5           -0.69
 Colombia peso                        3862.68           -1.12
 Peru sol                               3.549            0.00
 Argentina peso (interbank)           75.7100           -0.08

 (Reporting by Medha Singh in Bengaluru; Editing by Sandra