December 21, 2016 / 3:14 PM / 7 months ago

REFILE-EMERGING MARKETS-Brazil rate futures drop as inflation eases more than expected

3 Min Read

(Refiles to correct day of the week in lead paragraph.)
    By Bruno Federowski
    SAO PAULO, Dec 21 (Reuters) - Rates paid on Brazilian
interest rate futures fell on Wednesday as further signs of
easing inflation stoked bets on a sharper rate cut next month.
    Brazil's IPCA-15 consumer price index rose 6.58 percent in
the 12 months through mid-December, edging closer to the 6.5
percent ceiling of the government's target. 
    The figures fostered speculation that the central bank could
cut rates by 75 basis points at its January meeting, after
pursuing two 25 basis points reductions since October.
    Rate future prices <0#2DIJ:>, however, suggested most
traders still were betting on a 50 basis point cut. 
    The country's real currency strengthened 0.4 percent,
in line with other Latin American currencies.
    The Chilean peso rose more than its peers after
prices of copper, the country's main export, climbed further
away from a one-month low.
    Trading volumes have been thin in year-end trading as many
investors avoid big bets ahead of the Christmas holiday.
    
    Key Latin American stock indexes and currencies at 1500 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets                852.04     0.09      7.2
 MSCI LatAm                          2247.93     0.47    22.28
 Brazil Bovespa                     57469.00     -0.2    32.57
 Mexico IPC                         44899.21    -0.07     4.47
 Chile IPSA                          4181.34    -0.28    13.62
 Chile IGPA                         20918.43    -0.24    15.24
 Argentina MerVal                   16306.11      1.5    39.66
 Colombia IGBC                      10080.38      0.2    17.94
 Venezuela IBC                      28634.70     0.58    96.29
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                      Latest           
 Brazil real                          3.3305     0.36    18.51
 Mexico peso                         20.4635    -0.08   -15.80
                                                       
 Chile peso                              670     0.88     5.93
 Colombia peso                        2980.4     0.52     6.34
 Peru sol                              3.396     0.12     0.53
 Argentina peso (interbank)          15.8650    -0.09   -18.17
                                                       
 Argentina peso (parallel)             16.57     0.06   -13.88
                                                       
 

 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)

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