*

US PPI data stronger than expected

*

Brazil retail sales jump more than expected

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Argentina's Senate begins debate on Milei's economic

reforms

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Embraer ( ERJ ) shares leap to eight-year high

(Updated at 4pm ET/2000 GMT)

By Sruthi Shankar and Lisa Pauline Mattackal

March 14 (Reuters) - Most Latin American currencies and

stock indexes came under pressure on Thursday as

hotter-than-expected U.S. inflation data clouded expectations

for Federal Reserve interest rate cuts, boosting the dollar and

Treasury yields.

The dollar index, which gauges the currency against

six major peers, leapt 0.6% after data showed U.S. producer

prices increased more than expected in February, raising

concerns that U.S. inflation was picking up again.

The MSCI index tracking Latin American currencies

edged down 0.1% after briefly touching its

highest intraday level since 2011 earlier in the day.

Traders trimmed bets of a June start to U.S. interest-rate

cuts, though overall expectations for a cut at that meeting

remain above 60% according to CME's FedWatch tool.

"Core PPI advanced 0.3% from the previous month, suggesting

that inflation remains elevated and will continue to complicate

the Federal Reserve's rate-cutting plans," said Jack Ablin,

chief investment officer at Cresset Capital.

Following a strong 2023, Latin American markets have

struggled to make headway this year as investors grapple with

uncertainty around when U.S. interest would start falling, which

in turn would weaken the dollar and boost local currencies.

"Most emerging market currencies have depreciated in real

terms, implying emerging value, although the extent varies

significantly," analysts at Schroders wrote in a note.

The Brazilian real slipped 0.4% to trade at 4.991 per

dollar, despite data showing Brazil's retail sales volume grew

2.5% in January from the previous month, the biggest increase in

a year and well above analysts' estimates.

The monetary policy committee of Brazil's central bank will

meet next week. The authority kicked off its easing cycle in

August.

The Mexican peso and Peruvian sol fell 0.4%

and 0.3%, respectively. Colombia's peso and Chilean peso

were in the green, up 0.3% and 0.6%, respectively.

Stock markets in the region were mixed on Thursday, with

Brazil's Bovespa down 0.4%. MSCI's gauge of Latam stocks

lost 0.5%.

Argentina's Senate began a crunch debate on President Javier

Milei's sprawling "mega decree" of economic reforms, a major

test of the libertarian leader's ability to win over support in

a fragmented Congress.

Argentina's Merval index slipped 1.4%.

Embraer ( ERJ ) gained nearly 10% after Morgan Stanley

added the Brazilian planemaker to its top pick list.

Miner Vale fell 1.4%, as iron ore futures

extended losses in China.

Cemex shares jumped nearly 4% after S&P raised

the Mexican cement maker's debt to investment-grade on

Wednesday.

Key Latin American stock indexes and currencies at 2000 GMT:

Latest Daily % change

MSCI Emerging Markets 1046.51 0

MSCI LatAm 2506.78 -0.53

Brazil Bovespa 127512.15 -0.39

Mexico IPC 55981.59 0.24

Chile IPSA 6460.71 -0.47

Argentina MerVal 1036064.17 -1.394

Colombia COLCAP 1283.00 -0.09

Currencies Latest Daily % change

Brazil real 4.9917 -0.35

Mexico peso 16.7147 -0.33

Chile peso 939.7 0.61

Colombia peso 3890.06 0.28

Peru sol 3.6729 -0.30

Argentina peso 850.0000 0.00

(interbank)

Argentina peso 1005 2.99

(parallel)