November 30, 2018 / 2:24 PM / 16 days ago

EMERGING MARKETS-Mexican peso dips on trade worries, president-elect inauguration

    By Sruthi Shankar
    Nov 30 (Reuters) - The Mexican peso weakened on
Friday on market caution ahead of trade talks between U.S.
President Donald Trump and his Chinese counterpart, and the
inauguration this weekend of a new leftist president.
    The Brazilian real was little changed, but was
expected to remain volatile as traders sought to influence the
month-end Ptax rate that is used as a benchmark for futures
contracts.
    Investors, concerned about a protracted U.S.-China trade war
that has roiled financial assets for much of the year, played
down expectations that the meeting between Trump and Chinese
President Xi Jinping at the G20 Summit on Saturday will resolve
trade tensions between the two countries.
    "We don't think there will be anything concrete on the trade
talks with Trump and Xi. The best-case scenario would be some
sort of ceasefire," said Morten Lund, an analyst with Nordea
Markets in Denmark.
    Market sentiment this month has been largely driven by the
meeting on Saturday on concerns that a lack of resolution in
trade tensions will hurt world economic sentiment.   
    Mexican President-elect Andres Manuel Lopez Obrador's
decision to cancel a partially-built airport for Mexico City in
late October has left investors wondering how he will manage the
economy. He will give an inauguration speech on Saturday.
    "AMLO (Lopez Obrador) is taking office and it is with a lot
of nervousness that the markets are looking at it," Lund said.
    The latest minutes from Mexico's central bank meeting showed
policymakers thinking it was "indispensable" to hike interest
rates to counter confusion over future policies.
    Despite the peso's intraday losses, the currency was on
track to post its first gain in nine weeks as the U.S. dollar
has come under pressure after dovish comments from the Federal
Reserve chief Jerome Powell.
    The signing early on Friday of a revised U.S.-Mexico-Canada
trade pact had little impact on the currency's trajectory.

    The real was down nearly 3 percent for the month as
skepticism built over President-elect Jair Bolsonaro's efforts
to reduce Brazil's high fiscal deficit, including plans for an
overhaul of the pension system.
    The country's main Bovespa index edged higher,
hitting a new record high. Shares of Cosan SA Industria e
Comércio rose more than 2.5 percent after the
energy company announced a tender offer to repurchase $100
million of its U.S. shares.

    Key Latin American stock indexes and currencies at 1348 GMT:
    
 Stock indexes                              daily %      YTD %
                                             change     change
                                  Latest             
 MSCI Emerging Markets              995.65    -0.24     -13.85
 MSCI LatAm                        2626.31    -0.12      -7.03
 Brazil Bovespa                   89785.54     0.08      17.52
 Mexico IPC                              -        -          -
 Chile IPSA                        5149.69    -0.13      -0.13
                                                     
 Argentina MerVal                        -        -          -
 Colombia IGBC                           -        -          -
                                                              
 Currencies                                 daily %      YTD %
                                             change     change
                                                     
                                    Latest           
 Brazil real                        3.8575    -0.02     -14.11
 Mexico peso                       20.2930    -0.31      -2.93
                                                     
 Chile peso                            670    -0.12      -8.26
 Colombia peso                           -        -          -
 Peru sol                                -        -          -
 Argentina peso (interbank)              -        -          -
                                                     
 

 (Reporting by Sruthi Shankar in Bengaluru
Editing by Susan Thomas)
  
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