EMERGING MARKETS-Latam assets surge as commodity prices rally
* Brazilian real leads gains among Latam peers * Mexican peso hits more than four-week high * Argentine peso touches fresh low against dollar (Adds comments, updates prices) By Shreyashi Sanyal and Susan Mathew May 18 (Reuters) - Latin American assets roared higher on Monday, with Brazil's real jumping as commodity prices surged on hopes of economic recovery as countries eased pandemic-induced lockdowns. Encouraging data from a COVID-19 vaccine trial by U.S. drugmaker Moderna added to the optimism, bolstering Wall Street's rally. Brazil's real added 2.2%, while currencies of other oil exporters Mexico and Colombia firmed between 1% and 1.7%, with the Mexican peso touching a more than four-week high. Despite worrying rises in the number of new cases in emerging markets, especially Brazil, and simmering U.S.-China trade tensions, an index of Latam stocks jumped 6%. Its currency counterpart surged 1.4% after both indexes ended lower last week. Oil firms Petrobras and Ecopetrol climbed 9.7% and 6.2%, respectively, as crude prices rose, while iron ore miner Vale jumped 6.6%. Chile, the world's largest producer of copper, saw its peso climb 1%, while stocks were on track for their biggest daily gain in a month. Copper prices surged 2%. Outbreak hot spots such as Italy reopened shops and restaurants, while New York and Spain plan to lift restrictions gradually. In Mexico, automotive, mining and construction sectors will be told in 72 hours if they can resume operations, the government said. But the regional picture remained grim, with a central bank survey showing Brazil's economy is expected to shrink by more than 5% this year. The political scenario in Brazil remained precarious too, with Health Minister Nelson Teich resigning on Friday, as he and President Jair Bolsonaro showed themselves increasingly out of step, with Bolsonaro calling for a rollback of state quarantines and for the widespread use of unproven drugs, such as chloroquine, to fight the virus. Teich is the second minister to leave a post in Bolsonaro's government after Justice Minister Sergio Moro quit last month over differences with the president. "Having lost both his influential health minister and justice minister in recent weeks, the market wonders whether Bolsonaro's government is losing its way, potentially derailing efforts at structural economic reform," said Nicholas Mason, fund manager at Invesco. Argentina's peso marked a fresh low against the dollar with risk of a sovereign debt default looming. Argentina received three new counter-offers from creditors late on Friday with the deadline to restructure $65 billion in foreign debt lapsing this coming Friday. "We believe the authorities will continue to signal progress in the negotiations, with talks continuing after the aforementioned deadline, to limit the economic impact of a default," said analysts at Citi Research. Key Latin American stock indexes and currencies at 2025 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 912.57 1.27 MSCI LatAm 1632.00 5.91 Brazil Bovespa 81194.29 4.69 Mexico IPC 37005.50 3.68 Chile IPSA 3763.02 3.89 Argentina MerVal 40286.72 2.281 Colombia COLCAP 1082.96 2.77 Currencies Latest Daily % change Brazil real 5.7220 -0.03 Mexico peso 23.7510 0.75 Chile peso 820.7 0.67 Colombia peso 3851 1.40 Peru sol 3.4268 0.26 Argentina peso 67.8100 -0.12 (interbank) (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru; Editing by Dan Grebler and Tom Brown)
