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Brazil's retail sales rise below estimates in April

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Chile c.bank to cut interest rate to 5.75% in June -poll

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Peru interest rate decision due

By Ankika Biswas

June 13 (Reuters) -

Argentine assets rallied on Thursday, as investors drew

comfort from the Senate's passing of President Javier Milei's

economic reform bill, while Mexico's peso jumped 1% against the

dollar in otherwise weak Latin American currency trading.

Argentina's Senate approved a sprawling bill on late

Wednesday, key to the libertarian president's economic reform

plans. Protesters set fires and clashed with police in the

streets outside Congress.

The country's international dollar-denominated bonds gained

across the curve, with the 2029 maturity enjoying

the biggest gains, up 2.86 cents to be bid at 57.86, MarketAxess

data showed, also boosted by Argentina and China renewing the

activated part of a major currency swap line of $5 billion

through July 2026.

The Argentine peso also jumped 5.3% to 1,220 per

dollar in the parallel black market, while the benchmark stock

index soared 4%.

Senators are set to vote on each article of Milei's package

designed to boost investment by privatizing state entities and

providing incentives for businesses.

"The approval marks a bittersweet win for Milei's

administration with approval of a bill that has been six months

in the working but has been constantly diluted in the process,"

Citi analysts said in a note.

"The administration continues making progress on the

legislative front despite a lack of representation in Senate; we

remain overweight Argentina credit."

Investors also eyed inflation data out of Argentina later in

the day.

The Mexican peso strengthened 1% against the dollar

after dropping to a near three-month low in the previous day.

The peso, among the world's best performing EM currencies,

has been dragged down by the ruling party coalition dominating

in general elections, emboldening politicians to pursue

controversial reforms to the constitution.

The Bank of Mexico's governor Victoria Rodriguez said the

central bank is monitoring the recent volatility in domestic

financial markets, and could act to restore order in the event

of "atypical" or "extreme" behavior.

Weakness in most Latam currencies was also due to a firm

dollar index after the Federal Reserve adopted a hawkish

tone on Wednesday and pushed out the start of rate cuts to

perhaps as late as December.

The currency of the world's largest copper producer, Chile's

peso, slipped 0.1%, hurt by weak prices of the red

metal.

Chile's central bank is expected to lower its benchmark

interest rate by 25 basis points at next week's monetary policy

meeting, a poll of traders by the bank showed.

The Colombian peso also shed 0.7% against the dollar,

falling for the third day and touching its lowest level since

late November. Investors awaited the country's retail sales data

later in the day.

Peru's interest rate decision during the day was also on

investors' watch list. The sol dropped 0.3% on the day,

also hurt by weak copper prices.

Data showed Brazil's retail sales volumes in April rose less

than expected, but still hitting a fresh all-time high. The real

was largely unchanged against the dollar.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1077.08 0.8

MSCI LatAm 2174.50 0.52

Brazil Bovespa 120100.68 0.14

Mexico IPC 52929.36 -0.17

Chile IPSA 6536.71 0.02

Argentina MerVal 1623744.85 3.68

Colombia COLCAP 1382.32 0.11

Currencies Latest Daily %

change

Brazil real 5.4061 -0.04

Mexico peso 18.5380 1.04

Chile peso 918.7 -0.25

Colombia peso 4048.72 -0.70

Peru sol 3.77 -0.34

Argentina peso (interbank) 902.5000 -0.06

Argentina peso (parallel) 1265 2.37