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EMERGING MARKETS-Yields on Brazil long-term rate futures down after cost aim cut

By Bruno Federowski
SAO PAULO, Jun 29 (Reuters) – Yields paid on Brazilian
long-term seductiveness rate destiny contracts fell on Thursday after
the supervision cut a annual acceleration aim for a first
time in some-more than a decade and a offer to renovate labor
regulations privileged a congressional hurdle.
The National Monetary Council, Brazil’s top physique of
economic policy, set acceleration targets of 4.25 percent for 2019
and 4.00 percent for 2020, compared with a idea of 4.50
percent for prior years.
Economists approaching a reduction, though a reduce 2020 goal
came as a surprise. Before a preference was announced, they had
been forecasting an annual acceleration rate of 4.25 percent for
the years of 2019, 2020 and 2021, according to a weekly central
bank check expelled on Monday.
The reduce aim fostered bets that a executive bank could
cut rates by some-more than approaching subsequent year, traders said. Still,
short-term rate futures were prosaic as a opinion for a near
term remained intact, with yields suggesting a 75 basis-point
cut in a Selic rate subsequent month to 9.5 percent.
Hopes that President Michel Temer’s devise to revamp labor
regulations could pass a Senate opinion subsequent week also helped drive
long-term yields reduce after a congressional cabinet approved
the offer early on Thursday.
Demand for Brazilian resources has increasing on hopes that
Temer’s devise could quell open debt and boost long-term economic
growth, though ascent crime scandals have left some traders
cautious.
The Brazilian real, however, enervated 0.3 percent,
tracking other Latin American currencies lower.
The Mexican peso was down 0.8 percent as traders
booked increase from a new convene following
stronger-than-expected U.S. mercantile expansion data.
The U.S. news allayed some concerns over a gait of
economic expansion in a world’s No. 1 economy, that had
triggered bets on a delayed gait of seductiveness rate hikes in coming
months.

Key Latin American batch indexes and currencies during 1420 GMT:
Stock indexes daily % YTD %
Latest change change
MSCI Emerging Markets 1012.69 0.06 17.38
MSCI LatAm 2529.09 0.02 8.03
Brazil Bovespa 62165.99 0.24 3.22
Mexico SP/BVM IPC 49170.80 -0.34 7.73
Chile IPSA 4737.54 -0.2 14.12
Chile IGPA 23741.25 -0.18 14.50
Argentina MerVal 21434.53 0.19 26.70
Colombia IGBC 10796.19 0.3 6.60
Venezuela IBC 121784.38 -0.34 284.11

Currencies daily % YTD %
change change
Latest
Brazil genuine 3.2922 -0.26 -1.31
Mexico peso 17.9955 -0.83 15.27

Chile peso 661.9 0.18 1.33
Colombia peso 3031.57 -0.55 -0.99
Peru luminary 3.246 0.00 5.18
Argentina peso (interbank) 16.4800 -0.18 -3.67

Argentina peso (parallel) 16.62 0.60 1.20

(Reporting by Bruno Federowski)

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