EMERGING MARKETS-Mexican peso leads Latam losses after U.S. inflation shock

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    * Mexican peso, South African rand lead EM losses 
    * U.S. October consumer prices jump more than expected to
6.2%
    * Brazil's consumer prices rise 1.25% in October

 (Writes through with focus on Latin America)
    By Ambar Warrick
    Nov 10 (Businesshala) - Latin American currencies sank on
Wednesday, with Mexico's peso leading losses as a jump in U.S.
consumer price inflation fueled expectations of early rate hikes
in the developed world, denting risk-sensitive assets. 
    The peso fell 1.3%, with anticipation of a central
bank meeting on Thursday also fuelling volatility in the
currency. A Businesshala poll expects the central bank to hike rates
by 25 basis points to 5.0%. 
    But investors have been insisting on a sharper pace of
hikes, especially as data this week showed Mexican inflation
surged in October.
    U.S. consumer prices also increased more than expected in
October, pointing to more pressure on high-yielding emerging
market currencies such as the Mexican peso and the South African
rand. The rand slumped 2.6% after the data, severely
lagging its peers.
    The data raises the possibility of an early interest rate
hike by the Federal Reserve, which bodes poorly for risky
assets, as it raises debt burdens and narrows interest rate
differentials for currencies. 
    "The Federal Reserve is starting to taper its stimulus and
might be forced to hike interest rates sooner due to rising
inflation," said Nancy Davis, founder Quadratic Capital
Management.     
    Brazil's real was flat as data showed consumer
prices, as measured by the benchmark IPCA index,
rose above market forecasts in October. The data points towards
more rate hikes by the central bank, which could potentially
stifle economic growth in 2022.
    Brazil's Chamber of Deputies approved a proposal towards
increasing fiscal spending, adding to concerns over Brazil's
economic stability. 
    Now, the proposal must go to the Senate, where it needs to
be approved in two rounds of voting to enter into force.
President Jair Bolsonaro has been pushing for the bill seeking
to expand his social welfare program ahead of elections next
year as his popularity slides.
    It is becoming clearer that the government and its allies
have the numbers to block the amendment proposals and most
likely approve the bill, said Citi strategists. 
    "We believe this reinforces the thesis that the approval of
the (proposal) may allow the market to move on without too much
of a negative impact," they said, but warned that the Senate
discussion keeps risks alive. 
    Most other Latin American currencies fell, with MSCI's index
of regional units down 0.5%. 
    Peru's sol fell 0.3% as protesters blocked the Las
Bambas copper transport road again, raising fears of more
disruptions to the country's top export.
    
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1273.99                 0.08
                                        
 MSCI LatAm                    2176.46                -0.47
                                        
 Brazil Bovespa              106658.96                 1.06
                                        
 Mexico IPC                   51669.41                -0.85
                                        
 Chile IPSA                    4472.43                 0.04
                                        
 Argentina MerVal             96093.14                1.814
                                        
 Colombia COLCAP               1363.18                -1.55 Currencies             Latest      Daily % change
 Brazil real                    5.4910                -0.01
                                        
 Mexico peso                   20.5630                -1.27
                                        
 Chile peso                      794.8                -0.43
                                        
 Colombia peso                 3875.03                -0.27
 Peru sol                       4.0216                -0.30
                                        
 Argentina peso               100.1300                -0.01
 (interbank)                            
                                        
 
 (Reporting by Shashank Nayar and Susan Mathew in Bengaluru;
Editing by Bernadette Baum and Alistair Bell)
  
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