*

LatAm FX up 0.8%, stocks rise 1%

*

Brazil's economic activity falls more than expected in

July

*

Ukraine's dollar bonds rise over 1 cent

*

Turkish assets jump after court delays ruling

*

Peru's economy grows 3.4% year-on-year in July

(Updates with afternoon trading)

By Pranav Kashyap and Twesha Dikshit

Sept 15 (Reuters) -

An index tracking Latin American currencies extended its

record-setting run on Monday, led by the Brazilian real, as

traders positioned for the start of the U.S. policy easing cycle

later this week.

A gauge for regional currencies climbed

0.8% to a record high, marking its fourth consecutive

record-high session, buoyed by the dollar, which fell

0.3% on growing confidence that the Federal Reserve will cut

interest rates this week.

Markets are fully pricing in a quarter-point cut, while

also holding limited expectations for a larger 50 basis point

reduction, according to the CME Group's FedWatch tool.

Also in focus will be Fed members' "dot plot"

projections for rates and guidance from Fed Chair Jerome Powell

on the scope and pace of further easing measures.

"The focus in this meeting is going to be less on the

decision and more the path forward. The dot plot will be the

market's anchor," said Daniela Sabin Hathorn, senior market

analyst at capital.com.

"Given how much dovishness is already priced, any median

path that signals fewer cuts or a slower easing cycle in 2026

would read as hawkish."

Brazil's real gained 0.66%, surpassing its

one-year peak and heading for a fourth consecutive advance.

The country's central bank is widely expected to hold

borrowing costs steady on Wednesday, following July's pause

after implementing 450 basis points of hikes since last

September.

With borrowing costs at 15% to tackle persistent

inflation, Brazil's economic growth is showing signs of strain.

July activity fell more than expected, marking the third

consecutive monthly decline.

Stocks in Sao Paulo rose 0.91%, lifted by energy

companies Petrobras and Eletrobras, which

gained 1.4% and 3.2%, respectively, as crude prices advanced.

An index tracking Latin American equities

jumped 1.6% to its highest level in over a year.

The Mexican peso added 0.27%, while the local stock

index climbed 0.51%. This week, Mexican officials were

scheduled to meet with representatives from China to discuss

planned tariffs on goods from the Asian nation.

The country launched a three-tranche bond issuance worth

up to 5 billion euros ($5.88 billion) to partially fund a $9.9

billion bond buyback for state-run oil company Pemex, according

to LSEG's fixed-income news service IFR.

Peruvian equities were 0.76% higher

after data showed the economy expanded 3.41% in July, exceeding

expectations.

Argentine markets failed to recover from last week's selloff

following President Javier Milei's defeat in the Buenos Aires

provincial election. Stocks edged down 0.36%, while the

currency slipped to another record low on Monday.

Fresh GDP data for the second quarter is set to be

released on Wednesday and is expected to show a 6.5%

year-on-year

expansion following a downturn in the third quarter of 2024.

Turkey's markets surged on Monday, with Istanbul stocks

jumping 6%, their biggest one-day gain since May 2023,

and the lira rebounding after a court postponed a ruling

on removing the opposition party leader.

The move eased investor concerns following the earlier

ousting of the party's Istanbul provincial head, which shook

market sentiment.

Elsewhere, Ukraine's international dollar bonds climbed over

1 cent. A Reuters report said that one of Russia's largest oil

refineries had halted a key processing unit after a Ukrainian

drone strike over the weekend, as Kyiv intensified attacks on

Russia's energy infrastructure.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1328.35 0.2

MSCI LatAm 2507.08 1.15

Brazil Bovespa 142878.1 0.43

Mexico IPC 61935.38 0.22

Argentina Merval 1740820.5 -1.083

2

Chile IPSA 9066.33 0.85

Colombia COLCAP 1852.7 0.38

Currencies Latest Daily %

change

Brazil real 5.3275 0.5

Mexico peso 18.3826 0.13

Chile peso 951 0.26

Colombia peso 3892.3 0.16

Peru sol 3.4858 0.15

Argentina peso (interbank) 1467 -0.78

Argentina peso (parallel) 1425 0.00