LATAM WEEKAHEAD-Eyes on Mexico ratings, Argentina debt swap

By Walter Brandimarte

NEW YORK, Nov 8 (Reuters) - Details on Mexico's 2010 budget expenditures and on Argentina's proposed reopening of its 2005 debt swap will likely capture the attention of Latin American investors this week.

Rating agencies are probably waiting for the full picture of Mexico's 2010 budget to decide whether to downgrade the country's debt credentials. Mexico's lower house must pass the expenditures side of the budget by Nov. 15.

Fears of rating downgrades have been growing since late October when the Mexican Congress approved a watered-down tax reform aimed at reducing the country's reliance on waning oil revenues.

Reflecting those concerns, the Mexican peso sank to a one-month low on Friday, after losing about 1.6 percent during the past week.

"The market's attention (in Mexico) will likely be focused on any government leaks related to the expenditure side of the 2010 budget debate, as well as rating agency comments on it," RBC Capital Markets' analysts said in a research note.

In Argentina, the focus will be on any details of a proposed reopening of a swap of defaulted debt to bond holders who rejected a deal back in 2005.

Argentina's lower house on Wednesday approved a government bill asking permission for the reopening of the debt swap.

In terms of economic indicators, the week will be filled with key inflation and activity numbers in Brazil and Mexico.