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Latam stocks up 1.4%, FX up 0.9%

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Trump to help Argentina, World Bank to accelerate support

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Mexican economy shrinks 0.9% in July from June

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Brazil c.bank reiterates resumption of rate hikes if

needed

(Updated with graphic, afternoon prices, and analyst comment)

By Nikhil Sharma and Pranav Kashyap

Sept 23 (Reuters) - Argentine assets extended their

gains on Tuesday, buoyed by fresh confidence Washington will

throw its weight behind efforts to rescue the country's battered

assets.

Argentina's peso vaulted as much as 5%, extending

its two-day rally to over 7%, while the benchmark stock index

staged a sharp reversal from earlier in the day for a 1.1% gain,

building on Monday's 7.5% surge.

Dollar bonds kept up their blistering pace, with the 2030

maturity rising 4.7 cents on the dollar.

The rally got a fresh thrust from Trump, who pledged to

stand shoulder-to-shoulder with President Javier Milei, and

noting Argentina did not need a bailout.

"We are giving the president of Argentina our full backing

and endorsement," Trump said.

The World Bank also announced plans to fast-track up to $4

billion in support.

U.S. Treasury Secretary Scott Bessent had vowed "large and

forceful" support to Argentina, dangling options such as swap

lines and direct currency buys from the $219.5 billion Exchange

Stabilization Fund.

"For the short term, it's certainly good. That's a very big

improvement for ARS against the dollar," said Juan Perez,

director of trading at Monex.

"But in the long term, we'll see what the commitment

actually materializes into."

Separately, Argentina's economic activity likely grew 3.3%

year-on-year in July, according to analysts polled by Reuters.

Official data is set to be released on Wednesday.

The country's July retail sales data is due later in the

day.

The Brazilian real jumped nearly 1%, while Sao

Paulo's main stock index advanced 1.1% and is set for

its best day in over a month.

Investor sentiment was boosted after Trump said he plans to

meet Brazilian President Luiz Inacio Lula da Silva next week,

describing their brief U.N. General Assembly encounter as marked

by "excellent chemistry".

The real snapped a four-day losing streak, mainly powered by

the hawkish minutes from the central bank's latest policy

meeting where the bank said policymakers would not hesitate to

resume a hiking cycle if deemed appropriate. The central bank

held the Selic rate steady at 15%, a near two-decade high.

"We could see some profit taking in the real, wouldn't be

surprised if we saw some technical correction, but in the

near-term the overarching trends still continue to benefit the

real in the remainder of 2025," said Wilson Ferrarezi, Brazil

Economist at TS Lombard.

On a broader level, MSCI's index for Latin American

currencies was up 0.9%, flirting with record

levels, while a gauge of the region's equities

rose over 1.4% to its highest in over one year.

Mexican equities edged higher, while the peso

was flat as fresh data pointed to a deepening economic slowdown.

The country's GDP contracted 0.9% month-on-month in July and

1.1% year-on-year, highlighting the drag from elevated interest

rates despite a series of cuts earlier this year.

Banxico is scheduled to make a rate decision on Thursday,

where markets broadly expect a 25-bps cut to bring the benchmark

rate down to 7.50%. But policymakers may tread cautiously given

the fragile trade growth backdrop.

Separately, retail sales rose 0.1% in July from June and

increased 2.4% in July on a year-on-year basis.

The Colombian peso reversed gains, slipping 0.2%,

while local equities were flat.

The peso of the world's biggest copper producer, Chile

, advanced 0.9%, aided by higher red metal prices. The

Santiago stock index edged 0.3% higher.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1346.08 0.17

MSCI LatAm 2562.95 1.38

Brazil Bovespa 146714.91 1.11

Mexico IPC 62372.69 0.59

Argentina Merval 1831782.6 1.145

5

Chile IPSA 9147.15 0.33

Colombia COLCAP 1871.39 -0.01

Currencies Latest Daily %

change

Brazil real 5.2856 0.92

Mexico peso 18.348 0.01

Chile peso 948 0.86

Colombia peso 3854.86 -0.19

Peru sol 3.4958 0.15

Argentina peso (interbank) 1366 3.37

Argentina peso (parallel) 1390 6.12