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Colombia's June inflation on tap at 2300 GMT

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Chile's consumer prices down 0.1% in June

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Latam stocks up 0.9%, FX up 0.5%

(Updated at 3:17 p.m. ET/1917 GMT)

By Johann M Cherian and Shristi Achar A

July 8 (Reuters) - Most Latin American currencies kicked

off the week higher, with focus on inflation reports out of

local economies lined up through the week, while Chilean bond

yields ticked up as traders expected a hawkish stance on

interest rates later in the month.

MSCI's index tracking Latin American currencies

firmed nearly 0.5% against the dollar on Monday

on expectations the U.S. Federal Reserve could lower interest

rates at least twice in 2024 on signs of benign inflation and a

softening labor market.

Meanwhile, yield on Chile's sovereign bonds

rose after a central bank's poll showed

traders expect the regulator to hold its benchmark interest rate

at 5.75% at its next monetary policy meeting later this month.

The peso fell 0.3%.

Separately, data showed consumer prices fell 0.1% in June

from the previous month, compared with economists' expectations

of a 0.04% slip.

"Persistent tight financial conditions continue to restrain

overall inflation, and the anticipated impact of increased

electricity tariffs was less pronounced than expected," Andres

Abadia, chief Latam economist at Pantheon Macroeconomics said.

The peso has depreciated over 6% this year as the copper

producer's central bank kicked off its monetary policy easing

cycle earlier in the year. However, the currency found some

support as the regulator shifted to a more hawkish stance and

prices of the red metal got a lift.

Colombia's peso jumped 0.9% in thin trades ahead of

an inflation report at 2300 GMT, with economists expecting the

Consumer Price Index to increase by 0.27% in June, compared with

0.43% rise seen the month before.

"There's not a lot of progress being made on the inflation

front in Colombia...so it's no surprise that BanRep's (Colombian

central bank) latest decision threw cold water on expectations

for a faster pace of rate cuts. With that, today's data won't

help," said Juan Manuel Herrera, senior economist at Scotiabank.

Meanwhile, Mexico's headline inflation should show a clear

downward trend before its central bank can lower the benchmark

interest rate, deputy governor Jonathan Heath said in an

interview. Its currency was up 0.6%.

Brazil's real eased 0.3% from a sharp rebound in the

previous week after President Luiz Inacio Lula da Silva seemed

committed to fiscal stability.

On the equities front, MSCI's index tracking regional

bourses firmed 0.9%, with heavyweight Brazil's

Bovespa adding 0.3%.

Chile's main index was flat. The Andean country

saw copper exports increase in June, up 8% from a year earlier,

helping it achieve a trade surplus of nearly $2 billion during

the month.

Key Latin American stock indexes and currencies:

Latin American market prices from

Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1107.31 0.22

MSCI LatAm 2246.98 0.88

Brazil Bovespa 126382.00 0.09

Mexico IPC 52955.47 1.19

Chile IPSA 6487.11 0.05

Argentina MerVal 1637179.29 0.5

Colombia COLCAP 1382.08 -0.11

Currencies Latest Daily %

change

Brazil real 5.4779 -0.29

Mexico peso 17.9777 0.64

Chile peso 939.7 -0.30

Colombia peso 4042.5 0.95

Peru sol 3.7774 0.05

Argentina peso (interbank) 917.0000 -0.11