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LATAM FX up 0.1%, stocks down over 1%

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Mexico retail sales rise in March

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Chile's markets closed for public holiday

(Updates with mid-session prices)

By Nikhil Sharma and Purvi Agarwal

May 21 (Reuters) - Latin American currencies were little

changed, while stocks slumped on Wednesday, as concerns over the

growing U.S. fiscal debt clouded the economic outlook, while a

lack of any new developments on U.S. trade deals further

dampened the mood.

A gauge for regional equities fell 1.2% in

conjunction with global stocks. The index was on track for its

worst day in over a month. The MSCI regional currencies index

was slightly higher.

The dollar index fell as investors grew concerned

about U.S. President Donald Trump's sweeping tax bill, which

could further inflate the country's debt. However, the

Republicans were yet to unify around a path forward.

Wall Street's main indexes fell and long-dated Treasury

yields jumped on Wednesday ahead of a debate around Trump's tax

cut bill.

Analysts estimate Trump's tax bill would add $3 trillion to

$5 trillion to the fiscal debt.

Investors were also on the lookout for more trade deals out

of the U.S. before the 90-day tariff pause comes to an end, with

hopes that more agreements could cushion economies from the

impact of Trump's tariffs.

"People have been very heavily allocated to the U.S. for the

past 10 to 15 years and are starting to face uncertainty, see

how strong the dollar is, and are taking some profits off the

table," said Malcolm Dorson, head of EM Strategy at Global X.

Most Latam currencies were lower, led by the Mexican peso

, which fell 0.6%.

Stronger-than-expected retail sales figures, which showed a

4.3% rise in March, above estimates of a 2.2% increase, did

little to boost investor sentiment.

A Reuters poll showed that the country's headline inflation

rate likely accelerated in the first half of May, above the

central bank's official target.

The local stock index however, jumped 0.4%, boosted

by bottler FEMSA and mining company Grupo Mexico

.

Colombia's peso was down 0.4%, tracking a fall in oil

prices.

Meanwhile, Brazil's real firmed 0.4% against the

dollar, buttressed by resilient iron prices - the country's

biggest export item.

The local benchmark stock index, which is a

heavyweight on the broader index, slipped 1.6%, with lender Itau

Unibanco ( ITUB ) and power group Eletrobras

declining 2.2% and 1%, respectively.

"People who are looking to a potential weaker dollar are

looking to EMs... but are country specific on who has that

highest beta and Brazil's real is probably the most inversely

levered to the U.S. dollar," said Dorson.

Chilean markets were closed in observance of a public

holiday.

In other emerging markets, South Africa's rand

reversed earlier gains to fall 0.1%, after the new budget

projected a wider deficit and a higher debt. Earlier, the

currency had hit a more than 5-month high.

The country's main stock index closed 0.7% higher,

reaching a record high, after April inflation came in at 2.8%

year on year, below the central bank's 3% to 6% target range.

Elsewhere, Israel's international bonds fell after reports

of a potential Israeli strike in Iranian nuclear facilities

sparked worries about a supply disruption in the Middle East.

Bonds maturing in 2050 fell more than 1

cent to the dollar.

Key Latin American stock indexes and currencies around 2000

GMT :

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1175.94 0.73

MSCI LatAm 2253.27 -1.14

Brazil Bovespa 137898.21 -1.58

Mexico IPC 58563.83 0.43

Chile IPSA 8418.33 0.31

Argentina Merval 2318243 -2.53

Colombia COLCAP 1649.5 -0.79

Currencies Latest Daily %

change

Brazil real 5.644 0.42

Mexico peso 19.3792 -0.6

Chile peso 943.58 -0.08

Colombia peso 4175.5 -0.35

Peru sol 3.675 0.2

Argentina peso (interbank) 1146 -0.22

Argentina peso (parallel) 1155 1.73