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Brazil may issue new green bonds this year

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Mexico's CPI up 3.74% in mid-Sept

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LatAm stocks down 0.7%; FX down 0.6%

(Updates with analyst comment, afternoon prices, graphic)

By Nikhil Sharma and Pranav Kashyap

Sept 24 (Reuters) -

Argentine assets surged for a third straight session on

Wednesday, buoyed by Washington's

robust show of support

for President Javier Milei's government and the country's

financial markets.

Washington disclosed details of a financial lifeline to

Argentina, with U.S. Treasury Secretary Scott Bessent revealing

talks for a $20 billion swap line with the country's central

bank and signaling readiness to purchase Argentine dollar bonds

in the secondary market.

The announcement followed Milei's meeting with U.S.

President Donald Trump, who endorsed the libertarian leader and

dismissed the need for an international bailout.

Argentina is set to hold legislative midterm elections

on October 26, where Milei's party seeks to gain seats to

bolster its minority position in parliament.

Numerous U.S. companies are prepared to invest in Argentina

"in the event of a positive election outcome", Bessent said.

Additionally, the World Bank has pledged $4 billion in

funding over the coming months to support the South American

nation's reform agenda.

Argentina's international bonds rallied, with a 2029 note

jumping 4.4 cents on the dollar.

INVESTORS 'MORE COMFORTABLE' WITH US SUPPORT

The peso climbed to a one-month high, up 2.4% on

the day and nearly 10% since Monday, clawing back losses from

Milei's September 7 legislative setback. Buenos Aires stocks

extended their winning streak, surging 1.8% to notch a

three-day gain of nearly 12%.

"The swap line is very important for Argentina at this point

because the market was discussing if Argentina would be able to

honor the US dollar denominated maturities in the in the coming

years," said Murilo Riccini, head of Andean & Argentina equity

strategy at Bradesco BBI.

"The delta of the polls and approval rating of the

government until the election will be key to seeing if the

market can hold this rally or not. What we don't want to see is

situations like last week where the central bank needed to sell

the dollars."

In broader Latin America, the currencies index

lost 0.6%, with a stronger U.S. dollar weighing

on the regional currencies after Federal Reserve Chair Jerome

Powell struck a cautious tone on further policy easing.

The Brazilian real fell 0.8%, set for its steepest

one-day loss in over a month, while Sao Paulo's main stock index

was flat, just off record levels. Fresh data showed a

jump in Brazilian consumer confidence to its highest level since

the end of last year.

Treasury Secretary Rogerio Ceron said the government may

issue up to $2 billion in green bonds before year-end, signaling

a fresh

push to tap

sustainable finance markets.

Meanwhile, MSCI's gauge of the region's equities

also slipped about 0.7%.

Mexican equities slid nearly 1% and the peso

dropped 0.4%, both on track for their steepest single-day fall

in a month, as inflation accelerated in early September,

brushing up against the central bank's target ceiling.

The hotter-than-expected data arrives just ahead of

Banxico's rate decision on Thursday, with economists still

predicting a modest cut, betting the central bank will

prioritize sluggish growth over inflationary concerns.

If implemented, it would represent the 11th

quarter-point reduction since the beginning of 2024,

highlighting the central bank's cautious shift amid a fragile

economic recovery.

The Colombian peso weakened by 0.8%, while stocks

remained stable.

Colombia is also gearing up for a rate decision. The central

bank is expected to hold rates next week and extend that trend

for the rest of the year.

Chile's peso fell 0.4%, while its main stock index

flipped to trade 0.7% lower. Peruvian stocks

were a standout, up 1.8% to hit an all-time

high. Miner Minsur was set to start work on a $500 million

copper mine in October.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1350.23 0.27

MSCI LatAm 2541.39 -0.72

Brazil Bovespa 146386.32 -0.03

Mexico IPC 61841.33 -0.84

Argentina Merval 1847468.62 1.768

Chile IPSA 9081.55 -0.72

Colombia COLCAP 1872.49 0.06

Brazil real 5.3273 -0.85

Mexico peso 18.432 -0.42

Chile peso 952.48 -0.42

Colombia peso 3884.5 -0.8

Peru sol 3.4995 -0.05

Argentina peso (interbank) 1337 2.39

Argentina peso (parallel) 1390 1.44