EMERGING MARKETS-Mexican peso jumps on airport bond buyback plan, trade relief

Reuters - finance.yahoo.com Posted 5 years ago

* Brazil stocks climb to an all-time high * López Obrador took office as Mexico's President on Saturday * Chilean peso at two-month high By Agamoni Ghosh Dec 3 (Reuters) - The Mexican peso rallied on Monday after authorities offered to buy back bonds tied to a scrapped airport project, while a trade truce between the United States and China offered relief to emerging market assets, pushing Brazilian stocks to a record high.

The peso was on track to post its best day since July after the Mexico City Airport Trust said it offered to buy back up to $1.8 billion of the $6 billion in bonds tied to the airport project.

The peso has been battered in the past month by worries about perceived policy missteps by President Andres Manuel Lopez Obrador's team including scrapping of the partially built airport.

The peso rally came despite a hard-line inauguration speech by Obrador on Saturday, in which he pledged to bring about a "radical" rebirth of Mexico to overturn what he called a disastrous legacy of decades of "neoliberal" governments.

"All in all, the tone of his speeches was less conciliatory, from a market standpoint, than the one from the speech he delivered on the night of the elections on 1 July," said Credit Suisse analysts in a note on Obrador.

The Brazilian real gained 0.7 percent, climbing to a one-week high against the dollar while the Chilean peso rose 1.1 percent to reach a two-month high, as both currencies took a cue from their emerging market counterparts.

Brazil's main Bovespa stock index rose 1.89 percent to reach a fresh all-time high, led by steel and mining stocks as the metal's price recovered amid easing U.S.-China trade tensions. Usiminas was up 5.4 percent, leading the market higher, while Cia Siderurgica Nacional and Gerdau were each gaining about 4 percent.

Vale, the world's largest iron ore maker, was up 4.2 percent and contributed 390 points of the Bovespa's 1,324 point rise.

Key Latin American stock indexes and currencies at 1354 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1015.93 2.13 -14.13 MSCI LatAm 2661.76 2.39 -8.08 Brazil Bovespa 90777.36 1.42 18.82 Mexico IPC - - - Chile IPSA 5175.42 1.24 1.24 Argentina MerVal - - - Colombia IGBC - - - Currencies daily % YTD % change change Latest Brazil real 3.8211 0.88 -13.29 Mexico peso 20.0883 1.53 -1.94 Chile peso 665.4 1.07 -7.63 Colombia peso - - - Peru sol - - - Argentina peso (interbank) - - - (Reporting by Agamoni Ghosh in Bengaluru; Editing by David Gregorio)