EMERGING MARKETS-Latam FX weakens, Brazilian stocks up on pension reform hopes

Aaron Saldanha

hopes@ April 23 (Reuters) - Latin American currencies broadly softened against a robust dollar on Tuesday, while a surge in Brazilian shares on hopes lawmakers would approve a bill to reform the country's bloated pension system helped a key stocks index avoid a steeper loss. Brazil's pensions secretary said details of the government's pension reform proposal were still being ironed out prior to a congressional committee vote in the afternoon, with several local newspapers reporting the government had agreed to alter certain minor provisions. A report said the changes to the proposal agreed by President Jair Bolsonaro's government should not affect targeted savings from the overhaul of the system. "After last week's market reaction to the vote delay, an approval today is positive but is mostly in the price, in our view," Dirk Willer, head of emerging market strategy at Citi Research, and Kenneth Lam, an emerging markets FX strategist, wrote in a note. MSCI's index of Latin American stocks fell 0.3% as gains among the Brazilian shares on the index partially softened the impact of losses seen in other countries, such as Mexico. Yields on local 10-year Brazilian bonds dipped to about 8.96% from 8.98% on Monday, while the real traded about 0.6% weaker. Sao Paulo-traded stocks tacked on 1.1%, aided by gains across the sectors. Common and preferred shares of state-run oil firm Petroleo Brasileiro SA (Petrobras) rose 1.5% and 1.2%, respectively, aided by oil prices, which hit a 2019 peak earlier in the global day. Shares of miner Vale SA climbed 1%, in line with a move seen in Itaú Unibanco. A director of the bank said 2019 would be a strong year for capital market activities, and that 8 percent to 11 percent growth is expected in the lender's total credit portfolio. Mexican stocks slid 0.2% largely on losses among financials and consumer staples. The peso softened 0.7%. Analysts at CI Banco attributed the peso's weakness to the dollar's broad-based strength, adding that they expected the Mexican currency to trade in a range between 18.85 pesos and 19.05 pesos per dollar during the session. Mexico's seasonally adjusted unemployment rate was 3.6 percent in March, data showed. Chilean stocks slipped 0.2%, while the peso fell 0.6%, tracking lower prices of top Chilean export copper. Argentina's stocks benchmark rose 0.5%, while the country's peso was little changed. Colombia's peso softened 0.7%, while local stocks ticked up 0.1%, with energy firm Ecopetrol SA rising 0.5% on the back of higher oil prices.

Latin American stock indexes and currencies at 1434 GMT

Stock indexes daily %Latest changeMSCI Emerging Markets 1087.57 -0.13MSCI LatAm 2750.81 -0.31Brazil Bovespa 95597.29 1.07Mexico IPC 45277.87 -0.23Chile IPSA 5223.20 -0.21Argentina MerVal 30944.66 0.51Colombia IGBC 12994.31 0.1Currencies daily %

change Latest

Brazil real 3.9618 -0.75Mexico peso 18.9806 -0.82Chile peso 668.6 -0.70Colombia peso 3178.6 -0.78Peru sol 3.31 -0.18Argentina peso (interbank) 42.2800 0.57

($1 = 3.9395 reais)

(Reporting by Aaron Saldanha in Bengaluru Additional reporting by Miguel Gutierrez Editing by Paul Simao)