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Bonds News

EMERGING MARKETS-Latam's oil-linked currencies rise, Brazilian real abandons gains

    * Mexican, Colombian pesos rise as oil prices firm
    * Brazil's real trades lower, joins Chilean peso in the red
    * Argentina refuses to devalue currency or seize bank
deposits

 (Updates prices throughout)
    By Shreyashi Sanyal
    Oct 14 (Reuters) - Currencies of oil-exporters Mexico and
Colombia rose on Wednesday on the back of higher crude prices,
while Brazil's real gave back early gains as investors continued
to worry about the country's public finances. 
    The Mexican peso gained 0.3%, while Colombia's peso
added 0.6% after crude prices rose as the dollar weakened and
global equities rose.
    The U.S. dollar gave back gains it made on cautious trading
amid diminishing hopes for a COVID-19 vaccine or U.S. fiscal
stimulus.
    Global risk sentiment had been shaken after two separate
high-profile coronavirus vaccine trials by Johnson & Johnson
 and Eli Lilly were halted. 
    "While hurdles like these should be expected, investors
react sensitively to such news, especially now when many parts
of the world are facing a sharp increase in COVID-19 cases,"
said Milan Cutkovic, market analyst at Axi.  
    Brazil's real turned lower by midday trading
as investors grew doubtful of the government's ability to fund a
new fiscal package without overshooting its spending ceiling. 
    Latin America's largest economy has, however, benefited from
strengthening demand from China, which is one of its biggest
trading partners.  
    "The  rapid  post-pandemic  policy  response combined with
exposure to Chinese demand for industrial commodities have
fueled an early economic recovery (in Brazil) compared with many
EM peers," strategists at MRB Partners said. 
    Most emerging markets have been struggling to control the
spread of the coronavirus, slowing the pace of recovery in these
regions. The International Monetary Fund warned on Tuesday of a
worsening outlook for EM markets.
    Chile's peso extended declines to the third day, to
fall 0.2%, despite rising copper prices.
    Supervisors at Chile's Escondida mine and mine operator BHP
 decided on Tuesday to extend negotiations over a labor
contract for another day in a last-ditch attempt to stave off a
strike at the world's largest copper deposit.
    Data showed Argentina consumer prices rose 2.8% in September
versus a month earlier, just above forecasts. Meanwhile,
President Alberto Fernandez said Argentina will not devalue its
currency or seize bank deposits despite a financial crisis
compounded by the COVID-19 pandemic. Argentina's peso
continued to weaken.    
    The MSCI's index for Latin American stocks
rose 0.6%, with Sao Paulo stocks leading the advance as
heavyweights Petrobras and Vale gained. 
    
    Key Latin American stock indexes and currencies at 2008 GMT:
    
 
    Stock indexes                  Latest        Daily %
                                                 change
 MSCI Emerging Markets                  1134.73    -0.15
                                                 
 MSCI LatAm                             1922.28     0.55
                                                 
 Brazil Bovespa                        99473.02     0.98
                                                 
 Mexico IPC                            38015.23    -0.31
                                                 
 Chile IPSA                             3664.40     0.27
                                                 
 Argentina MerVal                      47233.32    2.693
                                                 
 Colombia COLCAP                        1171.36     0.05 Currencies                 Latest        Daily %
                                                 change
 Brazil real                             5.5977     0.06
                                                 
 Mexico peso                            21.3090     0.18
                                                 
 Chile peso                               798.9    -0.16
                                                 
 Colombia peso                             3837     0.60
 Peru sol                                3.5898     0.03
                                                 
 Argentina peso                         77.4700    -0.05
 (interbank)                                     
                                                 
 Argentina peso (parallel)                  163     1.84
                                                 
 

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Andrea
Ricci and Marguerita Choy)
  
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