March 20, 2019 / 4:00 PM / 3 months ago

EMERGING MARKETS-Latam stocks fall ahead of Fed meeting, forex mixed

    By Agamoni Ghosh
    March 20 (Reuters) - Latin American stocks fell in
broad-based declines on Wednesday as investors avoided riskier
assets ahead of a U.S. Federal Reserve rate decision and outlook
later in the day. 
    Currencies in the region were mixed, with the dollar steady
as traders awaited the Fed, which is expected to keep its
benchmark overnight interest rate unchanged and offer clues on
the direction of rates.
    "Conditions are not right for a rate rise today, but they
probably will be later this year," said Paul Donovan, Chief
Economist at UBS Global Wealth Management in a note. 
    Last year, emerging market assets saw significant outflows
due to the steady rise in U.S. borrowing rates.
    MSCI's index for Latin American stocks fell
0.6 percent tracking global equities, led by declines on the
Bovespa which was dragged down by shares of financial
and material companies.
    Brazil's real fell 0.1 percent, snapping a three-day
gaining streak ahead of a meeting of the country's central bank
policy-setting committee. 
    A Reuters poll of 21 economists showed that the central bank
will keep rates on hold at 6.50 percent this week, almost
exactly a year after it was cut to a record low, with signs
pointing to it staying there for most of 2019.
    "The room for rate cuts very much depends on passing the
pension reform," said analysts from Citi in a note. 
    "Considering the recent price action, the market might be
disappointed by a lack of dovish signals. But any pullback will
be limited in our view," the note added. 
    This will be the first meeting to be presided over by new
central bank chief Roberto Campos Neto, who succeeded Ilan
Goldfajn on Feb. 26.
    Mexican stocks were marginally lower with shares of
Cemex, one of the world's largest cement producers
falling over 1 percent after an unimpressive 2019 outlook. The
country's peso rose for a fourth-straight session. 

    Chile's peso rose marginally, while stocks on the
IPSA index fell 0.5 percent dragged by steel maker
CAP. 

    Key Latin American stock indexes and currencies at 1500 GMT
    
 Latin American market prices                                 
 from Reuters                                    
                                                 
 Stock indexes                                         daily %
                                Latest                  change
 MSCI Emerging Markets                  1068.55          -0.22
                                                 
 MSCI LatAm                             2876.16          -0.64
 Brazil Bovespa                        99199.77          -0.39
 Mexico IPC                            42298.51          -0.19
 Chile IPSA                             5278.61          -0.51
 Argentina MerVal                      34883.90           1.49
 Colombia IGBC                         13175.31           0.05
                                                              
 Currencies                                            daily %
                                         Latest         change
 Brazil real                             3.7906          -0.06
                                                 
 Mexico peso                            18.9337           0.42
                                                 
 Chile peso                               666.2           0.09
 Colombia peso                          3093.45           0.09
 Peru sol                                 3.296           0.06
                                                 
 Argentina peso (interbank)             41.2000          -1.58
                                                 
 

 (Reporting by Agamoni Ghosh
Editing by Susan Thomas)
  
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