February 12, 2020 / 2:36 PM / 13 days ago

EMERGING MARKETS-Brazil's real lags steady Latam markets as data disappoints

    * Real under pressure from weak retail sales data
    * Bovepsa lifted by another batch of earnings updates 
    * IMF set to begin debt talks with Argentina 

    By Sruthi Shankar
    Feb 12 (Reuters) - The Brazilian real was about flat on
Wednesday after sliding in early trade to a record low on
Wednesday after data showed retail sales dropped unexpectedly in
December, and broader Latin American markets gained on hopes
that the coronavirus outbreak in China has peaked.
    The real fell as much as 0.24% to 4.3419 before
trading little changed versus the dollar. The currency has been
pressured this year by slow overseas demand for Brazilian assets
with interest rates at a record low.
    Official figures showed retail sales fell 0.1% in December,
the first decline in eight months and another sign that consumer
spending in Latin America's No. 1 economy will not power growth.

    "The release extends the slew of disappointing data
undermining the growth narrative in Brazil and BRL longs,"
Citigroup's Dirk Willer wrote in a client note.
    "We stay on the sidelines in the BRL until more positive
data firmly closes to door to further easing."
    Other currencies in the region, however, recovered further
as China reported its lowest number of new coronavirus cases
since late January, supporting its senior medical adviser's
prediction that the outbreak might end by April.
    Currencies of Mexico, Chile and Colombia
 gained between 0.2% and 0.8%.
    Sao Paulo-listed shares added 0.5%, with payments
processor Cielo SA leading gains after Chief
Executive Officer Paulo Caffarelli said the company will seek to
reverse a fall in profits this year.
    Wireless carrier TIM Participações SA rose 3.8%
after it posted better-than-expected quarterly income, helped by
higher customer spending.
    The International Monetary Fund was set to start talks with
Argentina about economic policy, with the local bond market
muddled after a failed debt auction and unilateral reprofiling
of principal payments this week.
    On Tuesday, Argentina decided to postpone a $1.47 billion
principal payment on its AF20 bond until Sept. 30, after two
attempts to roll over the bond attracted low investor
participation.
    The government says it needs to rejig $100 billion in debt,
including $44 billion in loans to the fund, Argentina's biggest
single creditor.
    
    Key Latin American stock indexes and currencies at 1409 GMT:
    
         Stock indexes                   Latest    Daily %
                                                    change
 MSCI Emerging Markets                    1106.37      0.63
 MSCI LatAm                               2795.96      0.24
 Brazil Bovespa                         115906.98      0.46
 Mexico IPC                                     -         -
 Chile IPSA                               4684.04      0.51
 Argentina MerVal                               -         -
 Colombia COLCAP                                -         -
                                                           
             Currencies                  Latest    Daily %
                                                    change
 Brazil real                               4.3325     -0.16
 Mexico peso                              18.6280      0.14
 Chile peso                                 787.4      0.52
 Colombia peso                            3392.51      0.76
 Peru sol                                  3.3818      0.15
 Argentina peso (interbank)               61.2150     -0.16
                                                   
 
 (Reporting by Sruthi Shankar in Bengaluru; Editing by David
Gregorio)
  
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