June 7, 2017 / 9:50 PM / a month ago

EMERGING MARKETS-Brazil stocks, currency edge up as labor reform advances

4 Min Read

 (Updates with final prices, details from Mexico)
    By Bruno Federowski
    SAO PAULO, June 7 (Reuters) - Brazil's stock index and
currency on Wednesday advanced after a planned reform of labor
regulations cleared a hurdle in Congress, but uncertainty over
the outcome of an electoral court trial that could oust
President Michel Temer limited gains.
    Temer's proposal to loosen labor laws won approval from the
Senate's economic affairs committee on Tuesday, clearing the way
for a full-house vote and reducing expectations that a growing
political crisis could jeopardize his reforms agenda.

    The benchmark Bovespa stock index rose 0.34 percent,
driven higher by rising shares of banks such as Itaú Unibanco
Holding SA, Banco Bradesco SA and Banco do
Brasil SA.
    Brazil's real inched up only 0.13 percent as the TSE,
Brazil's top electoral court, argued whether Temer received
illegal campaign funding in 2014, when he ran for vice president
with his leftist predecessor, Dilma Rousseff.
    Temer's opponents see a ruling as a way out of the political
crisis set off by corruption allegations leveled against the
center-right leader, but a decision could take weeks, if not
months, and could be appealed by Temer.
    Trading was muted in much of Latin America.
    In Mexico, the IPC share index and the peso rose very
slightly as investors eyed events scheduled for Thursday, when
Britain holds a general election, the U.S. Federal Bureau of
Investigation's former director testifies to Congress and the
European Central Bank (ECB) meets to decide on policy.
    "Tomorrow may be the most important day of the quarter for
investors," analysts at Brown Brothers Harriman wrote in a note
to clients.
    Political noise has weighed on demand for risky assets in
recent days, with MSCI's emerging stock benchmark
dipping for a second day. Contributing to caution were decisions
by several Arab countries to cut diplomatic ties with Qatar,
accusing it of supporting terrorism. Qatar vehemently denies the
allegations.
        
    Key Latin American stock indexes and currencies at 2100 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                  Latest              
 MSCI Emerging Markets              1015.75    -0.01     17.8
 MSCI LatAm                         2565.46     0.38      9.6
 Brazil Bovespa                    63170.73     0.34     4.89
 Mexico IPC                        49274.97     0.11     7.96
 Chile IPSA                         4890.39    -0.44    17.80
 Chile IGPA                        24508.20     -0.4    18.20
 Argentina MerVal                  22218.66    -0.61    31.33
 Colombia IGBC                     10757.84    -0.56     6.22
 Venezuela IBC                     83374.02     0.94   162.97
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         3.2721     0.13    -0.70
 Mexico peso                          18.22     0.02    13.85
                                                      
 Chile peso                          668.90    -0.04     0.27
 Colombia peso                       2916.5    -0.74     2.91
 Peru sol                             3.271    -0.12     4.66
 Argentina peso (interbank)           15.98     0.09    -0.66
                                                      
 Argentina peso (parallel)            16.31    -0.12     3.13
                                                      
 
 (Reporting by Bruno Federowski; Editing by Jonathan Oatis and
Lisa Shumaker)
  

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