Friday, 25 Sep 2020

EMERGING MARKETS-Political noise weighs on Brazil's real; Chile plans lockdown easing

    * Brazil's privatization secretary resigns
    * Do not expect Brazil real to recover until next year -
analyst
    * Mexican central bank policy decision awaited on Thursday
    * Colombia peso slips as country tops 400,000 coronavirus
cases

 (Updates prices)
    By Shreyashi Sanyal and Susan Mathew
    Aug 12 (Reuters) - Brazil's real fell on Wednesday, weighed
by political uncertainty, while currencies of Mexico and Chile
firmed as the dollar weakened on a stalemate over U.S.
coronavirus relief aid.
    The real slumped 0.7%. Economy Minister Paulo Guedes
on Tuesday said Brazil's privatization secretary, Salim Mattar,
had stepped down, unhappy with the slow pace of privatizations
so far. Guedes also announced the resignation of the secretary
for de-bureaucratization, Paulo Uebel.
    That brought the number of Guedes' secretaries who have left
the government in recent months to four. Last week Guedes had
announced that Brazil would announce three or four large
privatizations within the next 30-60 days.
    Data showed Brazil's retail sales ended the first half of
the year on a strong footing, surging back to pre-crisis levels
as the easing of lockdown measures continued.
    Investors have cheered signs of a recent pick-up in economic
activity in Latin America's biggest economy but are now cautious
on the real amid surging COVID-19 cases, a dovish central bank
and worsening ties between the United States and China.
    "We do not expect the BRL to recover until next year, when
the crisis has subsided and the markets price out the corona
risk," said FX analysts at Commerzbank.
    Coronavirus cases continued to climb in South America, with
Colombia topping 400,000 confirmed cases on Tuesday, as deaths
climb toward 13,500. The Colombian peso fell 0.3% against
the dollar. 
    The dollar slid as U.S. Treasury Secretary Steven Mnuchin
said the White House and top Democrats may not be able to reach
a deal on coronavirus aid, in a fifth day without talks.

    The Mexican peso rose 0.4%. Investors await a central
bank policy decision on Thursday with a 50 basis point cut in
its key lending rate priced in.  
    Chile's currency firmed as the country's plans to
cautiously lift its lockdown on Santiago's central business
district and adjoining Central Station on Monday.
    Among stocks indexes, Argentina's Merval sank 3.5%
to post its worst day in six weeks, while Brazil's Bovespa
 slid 0.7%. 
    Argentina will formally submit its amended debt
restructuring offer to the U.S. securities regulator as early as
Thursday, two sources said, after an initial agreement was
reached with creditors earlier this month to restructure around
$65 billion in foreign debt.
    Most other regional stock indexes were flat to higher.
    
    Key Latin American stock indexes and currencies at 1919 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1094.31     0.28
                                   
 MSCI LatAm               1996.08    -0.69
                                   
 Brazil Bovespa         101459.00     -0.7
                                   
 Mexico IPC              38707.48     0.01
                                   
 Chile IPSA               4031.14     0.77
                                   
 Argentina MerVal        49207.11   -3.513
                                   
 Colombia COLCAP          1139.21     0.42
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.4497    -0.66
                                   
 Mexico peso              22.3398     0.21
                                   
 Chile peso                 792.5     0.00
                                   
 Colombia peso               3755    -0.62
                                   
 Peru sol                  3.5658    -0.17
                                   
 Argentina peso           73.0400    -0.05
 (interbank)                       
                                   
 
 (Reporting by Shreyashi Sanyal in Bengaluru; 
Editing by Bernadette Baum and Leslie Adler)
  

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