EMERGING MARKETS-Latam FX gains, Mexican rate hike expected as inflation surges

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    * Mexican consumer prices rise 6.24% in the year through
October
    * Brazil's real hits three-week high, stocks jump
    * Bolsonaro set to join the center-right Liberal Party

 (Adds details, updates prices)
    By Shashank Nayar and Ambar Warrick
    Nov 9 (Businesshala) - Most Latin American currencies gained on
Tuesday, with Brazil's real rallying more than 1% against a
steady dollar, while a spike in Mexican inflation raised bets
for another interest rate hike later this week.
    The Mexican peso was flat after consumer prices rose
6.24% in the year through October, more than double the central
bank's target, feeding concerns that increasing prices will
weigh on an economic recovery.
    Mexico's central bank, known locally as Banxico, will likely
raise its benchmark interest rate by 25 basis points to 5% on
Thursday in the wake of rising price pressures, according to a
Businesshala poll. Some analysts forecast a larger hike.
    "Rate hike expectations for Banxico ahead of the Fed meeting
last week had risen considerably with the swap market pricing in
rate hikes of up to 100bp until year-end, which points towards
rate steps of 50bp," wrote Elisabeth Andreae, an analyst at
Commerzbank. 
    Brazil's real jumped 1.2% to a three-week high. With
fiscal spending already a worry, President Jair Bolsonaro is
raising pressure on lawmakers regarding an amendment to expand
government spending next year, allowing him to ramp up welfare
programs during his re-election campaign.
    Bolsonaro, whose popularity is sliding, is set to join the
center-right Liberal Party.   
    Sao Paulo-listed stocks rose 1.3%, with a slew of
corporate updates in the spotlight.
   Shares of state-controlled lender Banco do Brasil SA
 rose 0.6% after its chief financial officer said the
bank will seek to increase profitability in the coming quarters.

    Pet products retailer Petz gained 6.1% on strong
earnings and guidance, while airline Gol fell 2.5%
after it reported a net loss for the third quarter as traffic
remained below pre-pandemic levels.
    The dollar was stable against a basket of currencies.
Investors now await inflation data due on Wednesday, which may
offer clues as to when the Federal Reserve will raise interest
rates.
    The currency of the world's top copper exporter, Chile
, jumped 1.3% to a more-than-one-month high of 791.7
against the dollar. But Chile cut its forecast for mining
investments through 2030 by 6.9% as two projects were removed.

    Meanwhile, impeachment proceedings against Chile's
center-right President Sebastián Piñera, over allegations of
irregularities in the sale of a mining firm, will advance to the
Senate after being approved by a majority of deputies in the
lower chamber. This comes just weeks before the presidential
elections. 
     
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1272.07                 0.26
                                        
 MSCI LatAm                    2188.95                 1.32
                                        
 Brazil Bovespa              106086.24                 1.25
                                        
 Mexico IPC                   51966.59                -0.55
                                        
 Chile IPSA                    4452.84                 2.06
                                        
 Argentina MerVal             94465.48               -1.644
                                        
 Colombia COLCAP               1377.27                -1.22 Currencies             Latest      Daily % change
 Brazil real                    5.4737                 1.23
                                        
 Mexico peso                   20.3109                 0.04
                                        
 Chile peso                      791.7                 1.34
                                        
 Colombia peso                 3864.52                 0.26
 Peru sol                       4.0086                -0.14
                                        
 Argentina peso               100.1100                -0.03
 (interbank)                            
                                        
 
 (Reporting by Shashank Nayar and Susan Mathew in Bengaluru;
Editing by Bernadette Baum)
  
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