July 30, 2019 / 8:14 PM / 22 days ago

EMERGING MARKETS-Latam markets hit by trade, Fed jitters

 (Updates with late market results)
    July 30 (Reuters) - Concerns about U.S.-China trade tensions
and anxiety ahead of the U.S. Federal Reserve's interest rate
decision kept the mood sober in Latin American markets on
Tuesday, with Brazilian shares taking a hit from lender Itau
Unibancoa's disappointing earnings.
    U.S. President Donald Trump warned China against waiting out
his first term to finalize any trade deal, saying the outcome
could be no agreement or a worse one if he won a second term.

    MSCI's index of Latin American stocks fell
more than 0.6%, with Sao Paulo-listed shares shedding
half a percent.
    Itau Unibanco Holding fell more than 3% as the
country's largest lender said it expects its loan book to grow
close to the bottom of its target range in 2019 and announced
cost cuts amid rising competition.
    Other banks such as Banco Bradesco and Banco do
Brasil fell more than 1%. 
    The real edged lower for a second day ahead of a
policy decision from Brazil's central bank on Wednesday. A
Reuters poll of 27 economists showed the median forecast was for
an interest rate cut of 25 basis points to 6.25%.
    Brazil is the latest among a series of developing world
economies to cut rates to combat a slowdown in growth, spurred
by trade disputes. However, the focal point for markets is
whether the Fed will signal whether its widely expected
25-basis-point rate cut is the start of a new easing cycle.
    "With cross-currents persisting and inflation remaining
subdued, we look for the Fed to leave the door open to further
easing but to avoid pre-committing to further cuts," TD
Securities macro strategist Oscar Munoz said in a note.
    Mexico's peso held steady, while its main stock index
 was weighed down by shares of miner Penoles, which
touched their lowest level in more than three years after its
Fresnillo subsidiary reported weak earnings.
    The Colombian, the Chilean and the Argentine
 pesos fell between 0.2% and 0.6%.

    Key Latin American stock indexes and currencies at 1931 GMT:
    
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets      1043.24    -0.24
                                     
 MSCI LatAm                 2855.49    -0.68
                                     
 Brazil Bovespa           102979.68    -0.49
                                     
 Mexico IPC                41163.59    -0.27
                                     
 Chile IPSA                 5003.22     0.05
                                     
 Argentina MerVal          42541.61    -0.57
                                     
 Colombia IGBC             12796.55     -0.5
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 3.7931    -0.27
                                     
 Mexico peso                19.0706    -0.09
                                     
 Chile peso                   699.6    -0.50
                                     
 Colombia peso               3299.5    -0.60
                                     
 Peru sol                    3.2860     0.36
                                     
 Argentina peso             43.9300    -0.20
 (interbank)                         
                                     
 
 (Reporting by Sruthi Shankar in Bengaluru; Editing by Dan
Grebler)
  
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