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Brazil's jobless rate ticks up but labor market remains

strong

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Chile's copper output up 10% in Feb

By Ankika Biswas

March 28 (Reuters) - Brazil's real slipped to a near

one-week low against a muted dollar in thin trading volume,

dragging the Latin American currencies index, while investors

awaited a key U.S. inflation test for more clues on the Federal

Reserve's policy outlook.

The MSCI index tracking Latam currencies

fell 0.2%, on track for only slight gains this quarter, losing

steam following the previous quarter's near 6% jump, with the

dollar index set for a strong quarterly advance, owing to

doubts over U.S. rate cuts this year.

"Some Fed members believe that rate cuts can be delayed and

that perhaps only two are needed. This puts renewed downward

pressure on all Latam and EM which now face a bit of central

bank policy divergence after committing to slashing borrowing

costs," said Juan Perez, director of trading at Monex USA.

All eyes will be on the Fed's preferred inflation gauge, the

so-called core personal consumption expenditures (PCE) price

index data, due on Friday. Any negative surprises could further

blur the U.S. rate cuts picture.

Meanwhile, the stocks gauge was set for a

quarterly decline, after a near 16% jump in the previous one.

Equity markets in Mexico, Argentina, Colombia, Peru will be

shut during the day owing to a public holiday, while Chile will

be partially closed.

While all Latam markets will be shut on Friday due to Good

Friday, Argentine markets will remain inactive until Tuesday.

On the data front, Brazil's jobless rate ticked up in the

three months through February but the largest Latam economy's

labor market remains resilient, with unemployment still close to

lowest levels since 2015.

Policymakers have been concerned that labor market strength

could feed into higher inflation and hinder monetary easing

cycle.

"We expect the hot labor market backdrop to stabilize in

coming quarters," Goldman Sachs analysts wrote.

The country's central bank revised up its economic growth

projection for this year to 1.9%, from the 1.7% seen in

December, which Finance Minister Fernando Haddad on Wednesday

had said could be revised to above 2.5%.

Brazil's real slipped 0.1% against the dollar, while

Chile's peso and Mexico's peso shed 0.3% and 0.1%.

Data showed Chile's unemployment rate rose to 8.5% in the

quarter through February, below estimates.

Top copper producer Chile's output of the red metal grew

9.95% year-on-year in February. Manufacturing production rose

8.8 annually, overshooting estimates.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1040.62 0.38

MSCI LatAm 2540.58 0.02

Brazil Bovespa 127622.23 -0.05

Mexico IPC 57369.01 0.28

Chile IPSA 6667.70 1.06

Argentina MerVal 1213484.60 -0.096

Colombia COLCAP 1332.98 1.13

Currencies Latest Daily %

change

Brazil real 4.9851 -0.12

Mexico peso 16.5459 -0.14

Chile peso 982.6 -0.32

Colombia peso 3861.22 0.00

Peru sol 3.7157 0.00

Argentina peso (interbank) 857.5000 -0.06

Argentina peso (parallel) 990 2.53