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Argentina launches $65 bln bond swap to push back 2024

debt

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Brazil Feb monthly inflation forecast at 1-yr high

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Brazil's Petrobras on track to extend losses

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Latam stocks down 0.4%; FX flat

(Updated at 4pm ET/2000 GMT)

By Ankika Biswas and Lisa Pauline Mattackal

March 11 (Reuters) - Latin American currencies were

largely muted against the dollar on Monday as investors awaited

U.S. consumer inflation data for clues on the Federal Reserve's

rate path, while Argentina's international dollar bonds slipped

after the country launched a $65 billion bond swap.

The MSCI index for Latam currencies was flat

after hitting a near two-month high on Friday, with the dollar

gaining some ground, as mixed data kept prospects of a June Fed

rate cut alive.

All eyes are on U.S. CPI data on Tuesday ahead of the

central bank's March monetary policy decision next week.

Emerging markets and other risky assets have been hit in 2024 as

investors pull back expectations for the size and timeline for

reduced borrowing costs.

"We are probably witnessing a lull in currency markets

before a major spurt," said Arthur Budaghyan, chief emerging

markets strategist at BCA Research.

Budaghyan expects the U.S. dollar to continue rallying,

which he said will lead to more volatility and depreciation in

emerging market currencies.

Meanwhile, Argentina's government will launch a huge

voluntary debt swap of peso and some dollar-linked instruments

set to mature in 2024, a bid to push back repayments amid a

major economic crisis hammering the South American country.

Prices of the country's dollar-denominated government bonds

slipped, with the 2038 note down about 2 cents.

The Merval stock index dropped 4%.

Investors will also monitor a slew of other data this week

including Brazil's inflation, Argentina's CPI and a likely

interest rate decision and Mexico's industrial output.

A Reuters poll showed Brazil's monthly inflation rate likely

accelerated to a one-year high in February. The real was

little changed against the greenback.

"More recently, price concerns have begun to re-emerge,

especially after January IPCA (inflation) surprised the market

to the upside," said Bank of America analysts in a note.

Top copper producers Chile's peso fell 0.6% as prices

of the red metal fell ahead of loan data from top consumer

China.

Among others, the Colombian peso lost 0.3% and

Mexico's peso was flat, tracking weakness in crude oil prices.

Meanwhile, the MSCI index tracking Latam stocks

fell 0.4% to early January lows.

Petrobras preferred shares fell 1.2% after

plunging more than 10% on Friday as the government pushed the

state-run company to reinvest cash set aside for dividends,

after its board spiked an extra dividend.

Losses in Petrobras, coupled with a near 3% drop in miner

Vale, kept Brazil's benchmark stock index at

around the three-month low hit on Friday.

Vale will retain Eduardo Bartolomeo as CEO through 2024,

Reuters reported

Stocks in Chile jumped over 1%.

Key Latin American stock indexes and currencies at 2000 GMT:

Latest Daily %

change

MSCI Emerging Markets 1038.84 0.17

MSCI LatAm 2481.15 -0.37

Brazil Bovespa 126239.21 -0.65

Mexico IPC 55134.31 0.36

Chile IPSA 6416.46 1.24

Argentina MerVal 958962.45 -4.327

Colombia COLCAP 1298.29 -0.05

Currencies Latest Daily %

change

Brazil real 4.9781 0.00

Mexico peso 16.7996 0.06

Chile peso 966.4 -0.61

Colombia peso 3911.32 -0.29

Peru sol 3.6762 0.01

Argentina peso 848.0000 -0.12

(interbank)

Argentina peso 985 1.02

(parallel)