SAO PAULO, July 19 (Reuters) - Yields on Brazilian interest-rate futures fell on Wednesday as traders increased bets on a sharp rate cut this month after a new report showing deflation. The IGP-M price index, released on Wednesday, fell 0.71 percent between June 21 and July 10, the latest indicator pointing to a drop in prices after the official IPCA index, released on July 7, fell in June for the first time in 11 years.
The report bolstered bets the central bank would cut the benchmark Selic rate by a brisk 100 basis points in its July meeting. The bank has suggested it could slow the pace of rate cuts to 75 basis points per meeting due to political turmoil. Rate future yields indicated an 83 percent chance of a 100 basis point reduction to 9.25 percent, with a 17 percent probability of a 75 basis-point drop. The Brazilian real was almost flat near two-month highs, supported by expectations of currency inflows after Grupo Carrefour Brasil SA priced Brazil's largest initial public offering in four years on Tuesday. The country's benchmark Bovespa stock index seesawed. Shares of Braskem SA were the biggest gainers after shareholders Petróleo Brasileiro SA and Odebrecht SA began talks to revise the shareholder accord in Latin America's largest petrochemical firm. Other Latin American markets treaded water, with the Mexican peso hovering near 14-month highs after Standard & Poor's revised the country's sovereign credit outlook up to "stable" from "negative" and commended the government's efforts to rein in a surge in debt.
Key Latin American stock indexes and currencies at 1550 GMT:
Stock indexes daily % YTD %
change change Latest
MSCI Emerging Markets 1060.32 0.67 22.15 MSCI LatAm 2731.32 0.06 16.62 Brazil Bovespa 65053.81 -0.43 8.01 Mexico S&P/BVM IPC 51150.32 0.1 12.07 Chile IPSA 5035.35 -0.09 21.29 Chile IGPA 25137.50 -0.06 21.24 Argentina MerVal 21398.34 1.67 26.48 Colombia IGBC 10975.47 -0.08 8.37 Venezuela IBC 128536.84 -1.31 305.41 Currencies daily % YTD %
change change Latest
Brazil real 3.1541 0.02 3.02 Mexico peso 17.4875 -0.05 18.62 Chile peso 654 0.23 2.55 Colombia peso 3007.45 0.00 -0.20 Peru sol 3.242 0.03 5.31 Argentina peso (interbank) 17.2500 0.00 -7.97 Argentina peso (parallel) 17.86 -0.11 -5.82
(Reporting by Bruno Federowski; Editing by Chris Reese)