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LatAm stocks up 1.1%, FX up 0.8%

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Brazil inflation seen below 5% in October - poll

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Chilean presidential election is later in the weekend

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Peru's rate decision due on Thursday

(Updates with afternoon trading)

By Nikhil Sharma and Sukriti Gupta

Nov 10 (Reuters) - Latin American assets started the

week on a stronger note on Monday, tracking upbeat momentum in

global markets, as investors cheered initial signs that the

historic U.S. government shutdown could soon come to an end.

MSCI's index for Latin American equities

jumped 1.1% to a near two-year high following a strong prior

week.

Global risk sentiment improved after the U.S. Senate on

Sunday advanced a measure aimed at reopening the federal

government and funding it through January to end a shutdown that

has reached its historic duration.

The renewed appetite for risky assets weighed on the U.S.

dollar, down 0.15%, allowing currencies in EM to shine. A

broader gauge for LatAm currencies jumped about

0.8% to an all-time high.

"(The shutdown end) will be relatively good news. It will

ease some pressures that we have seen on the market and perhaps

will help risk assets and bring some sort of stability in Latin

currencies," said Andres Abadia, chief LatAm Economist at

Pantheon Macroeconomics.

"This situation overall gives some support to commodity

prices, perhaps copper and other metals that are very important

for the region."

Meanwhile, Argentina's main equity index climbed

2.5%, while the local peso lost 0.3%. Economy

Minister Luis Caputo said Argentina plans to repurchase

sovereign bonds and rebuild foreign reserves, Bloomberg News

reported on Saturday.

Argentine dollar bonds jumped on Monday, with 2030 maturity

rising 1.7 cents on the dollar. The country's

markets have rallied since President Javier Milei's midterm

election win last month, solidifying investor confidence in his

economic overhaul.

In Brazil, the local real rose 0.5% to hit an over

one-month high. The currency strengthened 0.7% last week after

the central bank kept rates on hold and signaled a hawkish bias

for further pauses to bring inflation back to its 3.0% target,

with a tolerance band of ±1.5 percentage points.

According to a Reuters poll, Brazil's annual inflation is

expected to have fallen below 5% for the first time in nine

months in October. Official data are due on Tuesday.

Sao Paulo's main stock index rose 0.8% to a record

high, on pace to mark its 14th straight day of gains - its

longest winning streak in three decades. For the year, the index

is up 28.9%, highlighting investors' appetite for developing

markets, with cheaper valuations and higher yields, seen as

undervalued after periods of underperformance.

Colombia benchmark index has gained about 50% this

year - eyeing its best year since 2009. It was down 0.3% on

Monday ahead of October inflation data due later in the day. The

local peso was up 0.7%.

A key highlight this week will be Chile's presidential

election, scheduled for the weekend. The ruling leftist

coalition's candidate, Jeannette Jara of the Communist Party, is

leading in the latest polls for the first round on November 16

but could lose a runoff to either of two right-wing opposition

candidates.

Chile's peso was up 0.7%, boosted by higher copper

prices. The Santiago stock index jumped 0.6%.

Peru braced for an interest rate decision later this week

amid wider expectations that its central bank will maintain the

key rate on hold at 4.25%.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1400.14 1.34

MSCI LatAm 2664.11 1.05

Brazil Bovespa 155226.81 0.76

Mexico IPC 63198.59 -0.28

Chile IPSA 9660.17 0.57

Argentina Merval 2935768.19 2.48

Colombia COLCAP 2075.1 -0.3

Currencies Latest Daily %

change

Brazil real 5.3082 0.45

Mexico peso 18.3798 0.33

Chile peso 937.56 0.71

Colombia peso 3750.64 0.71

Peru sol 3.3664 0.25

Argentina peso (interbank) 1419.5 -0.32

Argentina peso (parallel) 1405 -7.82