January 30, 2019 / 2:41 PM / 8 months ago

EMERGING MARKETS-Latam FX mixed ahead of Fed policy decision; Brazil stocks rise

    By Agamoni Ghosh
    Jan 30 (Reuters) - Currencies in Latin America were mixed on
Wednesday ahead of the impending outcome of the U.S. Federal
Reserve's first policymaking meeting of the year, while stocks
in Brazil rose on a strong push from iron-ore miner Vale. 
    Mexico's peso fell about 1 percent, while Brazil's
real shed earlier gains, as investors hoped U.S.
policymakers would reinforce their recent dovish stance and not
raise borrowing costs amid signs of a slowdown in the economy.
    Adding to the Mexican peso's weakness was a Fitch rating
downgrade for state-run oil firm Pemex to the last rung of
investment grade. Pemex holds $106 billion in financial debt,
the highest of any state oil company in Latin America.

    "Given the systematic importance of Pemex for Mexico and its
large liabilities, such concerns have implications for the
sovereign and local assets," said Citi analysts in a note. 
    Chile's peso hovered around two-month highs ahead of
a central bank policy meeting where officials are expected to
raise benchmark interest rates to 3 percent from 2.75 percent.

    Global stock markets steadied on the day with Apple's
 results providing relief amid U.S.-China trade talks on
the anvil.
    Sao Paulo's benchmark index rose over 1.3 percent
led by shares of material companies, in particular Vale
 and its holding company Bradespar,
following a dam collapse last week that has killed more than 80
people and left hundreds missing.
    Shares of the iron-ore miner jumped over 7 percent after a 5
billion reais plan of action to cut output by 10 percent and
shut dams in wake of the Brumadinho tragedy. 
    Despite the production cuts and restitution costs, Vale
shows the greatest improvement in earnings amongst the peers,
said BMO Capital Markets in a note.
    Market participants in the region also watched developments
related to the fight to control Venezuela, which has the world's
largest oil reserves. 
    While the U.S. stayed put on its status of sanctions on the
Latin American crisis-stricken nation, Russia said irrespective
of internal political developments, it hopes the country will
honor its obligations to Moscow, including towards oil projects.

    Key Latin American stock indexes and currencies at 1415 GMT
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1032.44      0.26
 MSCI LatAm                      2883.00      0.92
 Brazil Bovespa                 96904.26      1.32
 Mexico IPC                            -         -
 Chile IPSA                      5411.65     -0.08
 Argentina MerVal                      -         -
 Colombia IGBC                         -         -
 Currencies                                daily %
 Brazil real                      3.7130      0.21
 Mexico peso                     19.1733     -0.98
 Chile peso                       665.95      0.13
 Colombia peso                         -         -
 Peru sol                              -         -
 Argentina peso (interbank)            -         -

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Bernadette
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