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

Ambar Warrick

* Brazil real surges after better-than-expected GDP

* Traders cautious after Trump says no trade deal deadline

* EM currencies due for recovery - analyst

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 % changeMSCI Emerging Markets 1037.69 -0.24MSCI LatAm 2665.12 0.08Brazil Bovespa 108640.25 -0.26Mexico IPC 0.00 -Chile SPIPSA 4476.25 -0.56Argentina MerVal 0.00 -Colombia Colcap 1598.33 -Currencies Latest Daily % changeBrazil real 4.1972 0.38Mexico peso 19.6041 -0.14Chile peso 800.4 0.35Colombia peso 3507.55 -0.13Peru sol 3.391 0.00Argentina peso (interbank) 59.9200 0.08

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