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Brazil's Suzano readies $15 bln bid for International

Paper ( IP )

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Chile central bank says economy recovering but some

sectors lag

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Brazil's Itau may pay extra dividend this year, says CEO

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Stocks up 0.2%, FX off 0.1%

(Updated at 1931 GMT)

By Shashwat Chauhan and Johann M Cherian

May 7 (Reuters) - Most Latin American currencies and

stocks were little changed on Tuesday, as investors stepped to

the sidelines on caution ahead of a slew of central bank rate

decisions and economic data out of the region.

MSCI's gauge for Latin American stocks

inched up 0.2%, while the currencies index

dipped 0.1% against the dollar, ending a three-day winning

streak, by 1931 GMT.

As the largest economy in the region, Brazil will be the

focus on Wednesday, as its central bank is widely expected to

cut interest rates by at least 25 basis points. The real

was largely flat.

Mexico's peso slipped 0.2%, with Banxico seen holding

rates at 11% at its policy meeting later in the week. Investors

will also keep a close watch on April inflation readings out of

the region's second-largest economy.

"Services sector inflation is still relatively high in

Mexico and it looks like it may be trending a bit higher," said

Brendan McKenna, international economist and FX strategist at

Wells Fargo Securities.

"It will take a little bit longer for Mexico to ultimately

deliver consistent interest rate cuts ... it wouldn't be

surprising to see a pause in easing cycle this week."

Among currencies of major economies in the region, oil

exporter Mexico's peso has held on to gains, so far into the

year benefiting also from higher oil prices and the impact of

near-shoring activity.

Among others, Chile's peso declined 0.7%. The local

central bank said that the copper producer's economy is broadly

recovering, though some sectors have lagged and financial market

depth has not yet returned to levels seen before the pandemic.

On the equities front, Brazil's Bovespa stock index

added 0.5%, briefly touching a four-week high.

Itau Unibanco ( ITUB ) jumped nearly 2% after Chief

Executive Milton Maluhy Filho said the lender has been working

with some excess of capital and will "calibrate" it toward the

end of the year to potentially pay extra dividends.

Embraer ( ERJ ) slipped over 2% after the plane maker

reaffirmed its full-year outlook and rebuffed speculation that

it plans to develop a new jet.

Rede D'Or jumped almost 9.3% after the Brazilian

health group recorded a 165.2% jump in first-quarter net profit,

beating market expectations.

Suzano tumbled 12.5% after Reuters reported that

the Brazilian pulp and paper company approached U.S.-based

International Paper ( IP ) to express interest in an all-cash

acquisition that would be worth almost $15 billion.

Among other major movers, Chile's main index added

1.2%, while Argentina's MerVal index shed 2.4%.

Key Latin American stock indexes and currencies at 1931 GMT:

Latin American market

prices from Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1067.62 0.08

MSCI LatAm 2502.54 0.22

Brazil Bovespa 129139.89 0.52

Mexico IPC 57121.42 -0.28

Chile IPSA 6580.04 1.28

Argentina MerVal 1460367.68 -2.371

Colombia COLCAP 1385.02 0.37

Currencies Latest Daily %

change

Brazil real 5.0687 0.10

Mexico peso 16.8991 -0.23

Chile peso 936.3 -0.69

Colombia peso 3889.33 0.09

Peru sol 3.7123 0.09

Argentina peso 880.5000 0.00

(interbank)

Argentina peso 1020 2.45

(parallel)