EMERGING MARKETS-Brazilian real, stocks lead gains among Latin American peers

BY Reuters | ECONOMIC | 11/29/22 10:36 AM EST

        *
      Latam stocks up 2.6%, FX gains 1.2%


        *
      Brazil stocks set to rally 13% by end-2023 - poll


        *
      Chile unemployment rate hits 8.0% in quarter through
October


        *
      Brazil's formal job creation is short of expectations in
October



    By Bansari Mayur Kamdar
       Nov 29 (Reuters) - Brazil's resource-heavy main stock
index jumped on Tuesday, supported by gains in commodity-linked
stocks, while a subdued dollar boosted Latin American
currencies.
    The MSCI's index for Latin American stocks
added 2.6%, with Brazil's Bovespa stock index leading
gains among regional peers, helped by a jump in materials and
energy stocks tracking strong commodity prices.
    Metal and oil prices rallied on hopes that protests against
COVID-19 curbs in China would lead to a faster easing of the
policies that have stifled economic growth and sparked concerns
about demand in top consumer China.
    The Bovespa has risen 5.9% so far this year, outperforming
the 24.5% fall in the broader emerging market.
    Brazil stocks will rally by double-digits through end-2023,
despite uncertainty about new government policies as
President-elect Luiz Inacio Lula da Silva seeks to balance
social priorities and budget constraints, a Reuters poll
predicted.
    "The case for Brazil outperformance is still intact, but
that near-term volatility should be expected," wrote Lawrence
Brainard, chief emerging markets economist at TS Lombard in a
note, adding that markets have misread Lula's policy priorities
and strategy.
    "While the extent to which Lula will be successful in
pushing through major economic reform is not yet clear, there is
widespread support from business and the broader public for
addressing the festering fiscal mess."
    Data showed Brazil's formal net jobs creation in October
came in well below expectations, in the second weakest month of
the year.
    The Latin American currencies index gained
1.2% on Tuesday and has risen 13.7% so far this year,
outperforming the broader emerging market.
    Brazil's real added 1.3% against a muted
dollar, leading gains among Latin American currencies.
    Mexico's peso added 0.8% against the dollar, with
stronger crude prices boosting the oil producer's currency.
Colombia's peso gained 0.5%.
    The United States on Monday threatened legal action against
Mexico's plan to ban imports of genetically modified corn in
2024, saying it would cause huge economic losses and
significantly affect bilateral trade.
    Currencies of the world's biggest copper producers, Chile
 and Peru, gained 0.7% and 0.6%, respectively.
    Chile's unemployment rate hit 8.0% in the August-October
period, government statistics agency INE said, stable from the
quarter through September.
    Elsewhere in emerging markets, data showed South Africa's
official unemployment rate fell slightly to 32.9% in the third
quarter of 2022 from 33.9% in the second quarter, but stubbornly
high youth unemployment remains a worry.
    Adding to concerns, South Africa's unreliable power supply
and its high level of government debt are two of the main risks
to its financial stability, said the country's central bank.
    Key Latin American stock indexes and currencies at 1455 GMT:
     Stock indexes                Latest      Daily % change
 MSCI Emerging Markets                953.16             2.41

 MSCI LatAm                          2198.28             2.56

 Brazil Bovespa                    111092.52             2.12

 Mexico IPC                         51118.53             0.07

 Chile IPSA                          5210.93             0.06

 Argentina MerVal                  165079.42            0.488

 Colombia COLCAP                     1246.14             0.41


        Currencies                Latest      Daily % change
 Brazil real                          5.2948             1.30

 Mexico peso                         19.1610             0.70

 Chile peso                            906.9             0.62

 Colombia peso                       4806.82             0.50
 Peru sol                             3.8281             0.11

 Argentina peso (interbank)         166.9500            -0.20

 Argentina peso (parallel)               313             1.60


 (Reporting by Bansari Mayur Kamdar in Bengaluru; editing by
Jonathan Oatis)

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