EMERGING MARKETS-Mexico's peso edges up on likelihood of more rate hikes

BY Reuters | ECONOMIC | 05/16/22 11:17 AM EDT
       * MSCI Latam stocks rise 1.3%, currencies up 0.5%
    * Mexico's peso edges higher on interest rate hike bets
    * Chile's peso gains 0.3% as copper prices climb
    * Colombia GDP data due at 1200 EST/0400 GMT; peso jumps

    By Anisha Sircar and Bansari Mayur Kamdar
    May 16 (Reuters) - Mexico's peso inched higher on Monday as
central bankers hinted at more interest rate hikes to control
surging inflation, while most other Latin American currencies
eked out gains with a cautious eye on the dollar's flirtation
with two-decade highs.
    MSCI's index of Latam currencies rose 0.5%
as the dollar index consolidated gains near a 20-year
peak hit last week. Stocks rose 1.3%.
    Mexico's peso gained 0.3% against the dollar. Mexican
central bank Governor Victoria Rodr?guez said in an interview https://www.elfinanciero.com.mx/economia/2022/05/14/plan-de-amlo-contra-la-inflacion-llevara-un-tiempo-sera-gradual-rodriguez-ceja
 published on news platform El Financiero over the weekend that
the bank was ready to hike its monetary policy rate faster, if
    On Friday, Bank of Mexico board member Jonathan Heath said
there is still a "way to go" on tightening policy following the
bank's 50-basis-point rate hike to 7.0% last week.
    "Latin American currencies seem better for emerging market
investors and definitely places like Brazil, with people
thinking they might be closer to the end of their tightening
cycles versus some other countries that have a lot more to
come," said Rachel Ziemba, founder of Ziemba Insights.
    A flight of capital from Asian markets due to recent dour
macroeconomic data from China, as well as outflows from Europe,
are boosting Latam assets, Ziemba added.
    Brazil's real advanced 0.4% before trimming
its gains after central bank figures showed government debt as a
share of gross domestic product fell to 78.5% in March from
79.2% in February.
    Chile's peso rose 0.3% as copper prices firmed after
China's plans to ease COVID-19 curbs raised demand hopes. A
constitutional assembly in Chile, the world's top producer of
copper, on Saturday rejected a major overhaul to mining rights.

    Brazilian state-run oil firm Petrobras SA and
metal and mining company Vale SA (VALE) climbed more than 2%
each, tracking firm commodity prices and lifting Brazil's
Bovespa by 0.8%.
    Colombia's peso added 0.8%, set for its best day in
more than a month, ahead of GDP data due later on Monday. The
economy is expected to have grown by 7.5% in the first quarter
from a year ago.
    Peru's sol was little changed after official figures
showed the economy grew 3.79% in March compared with a year
earlier, lower than the central bank's 4% forecast, with the key
mining industry shrinking as social conflicts hit production.

    Elsewhere, the Russian rouble
strengthened past 64 to the dollar and to its highest level in
nearly five years against the euro, supported by restrictions on
currency trading.

    Key Latin American stock indexes and currencies at 1500 GMT:

   Stock indexes            Latest    Daily % change
 MSCI Emerging Markets       1006.73             0.22

 MSCI LatAm                  2276.25             1.44

 Brazil Bovespa            107707.36             0.73

 Mexico IPC                 49721.23             0.29

 Chile IPSA                  4904.12             1.11

 Argentina MerVal           89129.48            0.376

 Colombia COLCAP             1520.16             0.53

      Currencies            Latest    Daily % change
 Brazil real                  5.0592            -0.05

 Mexico peso                 20.0870             0.00

 Chile peso                    857.5             0.33

 Colombia peso               4075.85             0.68

 Peru sol                       3.77             0.48

 Argentina peso             117.8700            -0.37

 Argentina peso                  201             1.24

 (Reporting by Anisha Sircar in Bengaluru; Editing by Paul

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