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EMERGING MARKETS-Most Latam FX firm, Argentine peso stable after cabinet picks

By Susan Mathew

(Updates prices) By Susan Mathew Dec 9 (Reuters) - Latin American currencies firmed on Monday, with Brazil's real touching a month's high and Mexico's peso extending gains to a fifth session, as the dollar held steady in the face of poor export data highlighting the need for a U.S.-China trade deal. In Argentina, the battered peso was stable, while bond prices rose and country risk spreads tightened, showing the market took President-elect Alberto Fernandez's cabinet picks - featuring debt restructuring expert Martin Guzman as economy minister - in stride. Argentine markets had been on edge since Fernandez thumped President Mauricio Macri in the August primary election as it signaled a shift away from Macri's pro-business policy stance. Broader sentiment was swayed by weak export data from China that served to remind investors of the economic slowdown bought about by the Sino-U.S. trade war, although markets have so far held out hope for an interim deal before the Dec. 15 deadline. "If the December tariffs on China go ahead, then our (bullish) view (on EM) is going to come under more significant pressure, with the anticipated EM growth recovery pushed from Q1 2020 to Q3 2020," Morgan Stanley analysts wrote in a note. Investors will also be watching for outcomes of the U.S. and European central bank policy meetings this week, while locally Brazil's rate decision is also awaited. Brazil's real rose 0.2%. On Wednesday, the monetary policy committee is expected to lower its key interest rate to a new low of 4.50%, but stronger-than-expected economic data suggest this may be the last cut in the cycle, a Reuters poll showed. "We think monetary policy is now about to enter a prolonged period of inaction, and the accommodative environment that's here to stay will help accelerate ongoing changes in local credit markets and deepen the recovery," said Gustavo Rangel, chief economist, LATAM at ING. Sao Paulo-listed shares were flat, but carrier Gol Linhas Aereas Inteligentes and its loyalty program, Smiles Fidelidade rallied after Gol made a more generous offer to buy out Smiles. Mexico's peso gained 0.5%, while stocks climbed 0.2% as the country's government urged United States to push through the United States-Mexico-Canada trade deal. Data on Monday showed that Mexico's annual inflation fell below the central bank's 3% target in November, adding to expectations that the bank will cut rates further. Key Latin American stock indexes and currencies at 1937 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1051.70 0.26 MSCI LatAm 2757.13 0.87 Brazil Bovespa 111098.25 -0.02 Mexico IPC 42023.28 0.2 Chile IPSA 4748.20 0.52 Argentina MerVal 36218.77 -0.939 Colombia COLCAP 1610.12 -0.1 Currencies Latest Daily % change Brazil real 4.1305 0.35 Mexico peso 19.2294 0.37 Chile peso 775.2 0.24 Colombia peso 3413.8 0.20 Peru sol 3.374 0.09 Argentina peso 59.9400 0.02 (interbank) (Reporting by Susan Mathew and Ambar Warrick in Bengaluru; Editing by Marguerita Choy)