December 20, 2019 / 7:23 PM / a month ago

EMERGING MARKETS-Latam assets trend lower, but eye weekly gains on trade optimism, 2020 outlook

    * Brazil shares dip from record highs
    * MSCI Latam stocks up about 1.8% for the week
    * Moderately optimistic about EM in 2020 -analyst

 (Writes through with details on USMCA, updates prices)
    By Ambar Warrick
    Dec 20 (Reuters) - Latin American markets descended from
recent peaks on Friday, but were set to end higher for the week
amid positive trade headlines and a relatively strong outlook
for 2020.
    The MSCI's indexes of Latin American stocks
and currencies were both set for weekly gains,
having benefited largely from risk-on buying after the United
States and China signed an interim trade deal.
    Analysts also expect growth in the region to improve in the
next year, after having bottomed out during 2019 as a result of
a mix of trade ructions and local political strife. 
    "2020 is still a lot of question marks. We're moderately
constructive on EM, but we're not raging bulls. The concerns
that were there a month ago have definitely eased," said Win
Thin, head of emerging market currency strategy at Brown
Brothers Harriman.
    "In general, Latin America looks a lot better than it did a
month ago." 
    Mexican assets trended in a flat-to-lower
range on Friday. The U.S. House of Representatives late on
Thursday backed a new trade agreement with Mexico and Canada,
with Mexico's finance minister flagging increased jobs and
investment for the country from the deal.
    Brazil stocks retreated about 0.3%, coming off two
consecutive record-high finishes. Latin America's largest
economy has seen a recovery in growth over the fourth quarter,
stemming from the effects of a recent easing cycle by the
country's central bank. Widespread pension reforms are also
expected to push government money into improving infrastructure.
    The real weakened against the dollar. A poll showed
that the approval rating of Brazilian President Jair Bolsonaro's
government is dropping steadily, and that his negative rating is
climbing.
    Data earlier in the day showed Brazil's IPCA-15 consumer
price index rising at a better-than-expected rate in the month
up to mid-December. The country's
    Chile's stock index was slightly lower, while the
peso surged after Congress approved a plan to ask voters
whether the country needed a new constitution. The issue has
been a central demand of protesters who have brought the country
to a near standstill since October and prompted central bank
intervention to protect the peso.
    Argentine stocks rose, while the peso was
muted after the country appointed a government team to kick off
talks with creditors to renegotiate about $100 billion in
sovereign debt. Concerns over the country defaulting on its debt
had sparked a currency crisis earlier in the year. 
    
    
    Key Latin American stock indexes and currencies at 1900 GMT:
   
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets         1108.15              0.14
                                        
 MSCI LatAm                    2891.81             -0.58
                                        
 Brazil Bovespa              115064.82             -0.06
                                        
 Mexico IPC                   44524.76             -0.28
                                        
 Chile IPSA                    4745.99             -0.15
                                        
 Argentina MerVal             38649.00             1.486
                                        
 Colombia COLCAP               1644.85             -0.11
                                        
                                                        
       Currencies             Latest     Daily % change
 Brazil real                    4.0915             -0.72
                                        
 Mexico peso                   18.9237             -0.06
                                        
 Chile peso                      753.4              0.05
                                        
 Colombia peso                    3329             -0.54
 Peru sol                        3.314              0.54
                                        
 Argentina peso                59.8150              0.00
 (interbank)                            
                                        
 
 (Reporting by Ambar Warrick in Bengaluru; Editing by Dan
Grebler)
  
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