December 3, 2019 / 2:53 PM / 10 days ago

EMERGING MARKETS-Latam stocks subdued; currencies firm against weak greenback

    * Brazil real surges after better-than-expected GDP
    * Traders cautious after Trump says no trade deal deadline
    * EM currencies due for recovery - analyst 

    By Ambar Warrick
    Dec 3 (Reuters) - Most Latin American stock markets traded
in a tight range on Tuesday, while currencies strengthened
against a weak dollar, as comments by U.S. President Donald
Trump sparked fears of a delay in the resolution to the
Sino-U.S. trade war.
    Global equities dropped after Trump said a trade deal with
China might be delayed until after the November 2020 U.S.
presidential election. Possible U.S. duties on French goods also
kept markets on edge.
    Investors had earlier expected an interim trade deal between
Washington and Beijing by mid-November, but the prospect of a
delayed conclusion now opens the door for further escalation in
tensions that have dogged risk assets for more than a year. 
    A basket of Latin American stocks moved in a
flat-to-low range, with Brazilian and Chilean
equities reflecting similar trades.
    "Trade headlines are certainly making for cautious trade in
markets...the mood has certainly become less positive," said
William Jackson, chief emerging markets economist at Capital
Economics. "It's not a particularly big move one way or the
other," he added, referring to Brazil's stock index.
    Regional currencies fared slightly better, with an index of
local units rising about 0.1% against a weaker
dollar, which held declines following disappointing
manufacturing data from the United States on Monday.
    "The combination of a recovering global economy and softer
U.S. is encouraging for USD weakness," Morgan Stanley said in a
note, referring to stronger-than-expected manufacturing data
from China on Monday.
    "We do expect to see further evidence of a global growth
rebound going forward and believe this will help EM currencies
to recover."
    Brazil's real surged as much as 0.8% after data
showed the country's economy expanded at a faster-than-expected
pace in the third quarter.
    Upward revisions to GDP figures for the first two quarters
this year also meant that Latin America's largest economy
steered further clear of recession than previously thought. 
    The Chilean peso rose amid efforts by the country's
central bank to shore up the currency, with an interest rate cut
appearing likely this week, according to a Reuters poll.

    The Colombian peso fell about 0.1%, while the Mexican
peso eased around 0.1%.
    
    Key Latin American stock indexes and currencies at 1428 GMT:
   
     Stock indexes              Latest       Daily % change
 MSCI Emerging Markets           1037.69                 -0.24
                                          
 MSCI LatAm                      2665.12                  0.08
                                          
 Brazil Bovespa                108640.25                 -0.26
                                          
 Mexico IPC                         0.00                     -
                                          
 Chile SPIPSA                    4476.25                 -0.56
                                          
 Argentina MerVal                   0.00                     -
                                          
 Colombia Colcap                 1598.33                     -
                                          
                                                              
        Currencies              Latest       Daily % change
 Brazil real                      4.1972                  0.38
                                          
 Mexico peso                     19.6041                 -0.14
                                          
 Chile peso                        800.4                  0.35
                                          
 Colombia peso                   3507.55                 -0.13
 Peru sol                          3.391                  0.00
                                          
 Argentina peso (interbank)      59.9200                  0.08
                                          
 

 (Reporting by Ambar Warrick in Bengaluru
Editing by Alistair Bell)
  
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