*

Latin American currencies rise 0.5%, stocks up 0.49%

*

IMF projects Brazil's economy will grow 2.3% this year

*

Brazil's fiscal package delayed to next week

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Liberal Lee Jae-myung wins South Korea presidency

(Updates to mid-session trading)

By Pranav Kashyap and Nikhil Sharma

June 3 (Reuters) - Latin American assets rose in

cautious trade on Tuesday, led by Brazil's real, which defied

the postponement of the fiscal package, while traders remained

focused on the unpredictable landscape of U.S. trade policy.

MSCI's composite index for Latin American currencies

ticked up 0.5%, extending the previous session's

0.9% uptick. Regional equities, as measured by,

rose 0.49%.

Brazil's real traded 0.6% higher against the dollar,

at a near two-week peak. Sao Paulo's Bovespa rose 0.49%.

Brazil's much-anticipated fiscal package - a critical

maneuver to rein in the nation's persistent budget deficit that

was originally slated for an afternoon unveiling - has been

punted to next week. Finance Minister Fernando Haddad clarified

that the measures would be revealed after a Sunday meeting with

congressional leaders.

Brazil, the continent's economic behemoth, is in a

high-stakes race to eliminate its deficit this year before

interest payouts.

The International Monetary Fund (IMF) upgraded Brazil's

economic growth forecast to 2.3% for the current year, a

30-basis-point bump from its April projection.

Brazilian President Luiz Inacio Lula da Silva said his

country has been trying to negotiate tariffs with the U.S., but

vowed to take action if no agreement is reached.

The overarching narrative of U.S. trade policy continued to

dictate global risk appetite. Hopes for a breakthrough gained

traction after a Reuters report said the Trump administration

urged nations to submit their most compelling trade offers by

Wednesday, pushing for acceleration in negotiations ahead of a

90-day tariff pause deadline just five weeks away.

Further assuaging concerns, the prospect of a high-stakes

dialogue between U.S. President Donald Trump and Chinese leader

Xi Jinping later this week provided a ballast.

"LatAm avoided high reciprocal tariff rates due to

relatively balanced trade with the U.S. in the region ex-Mexico,

and given deep integration of North American supply chains,"

said Joseph Incalcaterra, head of LatAm FX strategy at HSBC

Securities.

"Currently, the region is on the back-burner as the U.S.

focuses on trade deals with Europe and Asia."

Mexico's peso was flat, while its benchmark equity

index retreated 0.1%.

Domestic concerns centered on the nation's inaugural

judicial elections, part of a contentious judicial reform.

A notably low turnout on Sunday amplified fears that the

vote could undermine the very legitimacy of the overhaul,

introducing a fresh layer of political uncertainty.

Elsewhere, Chile's peso eased 0.2%, while Santiago

Stock Exchange's main index rose 0.9%.

Colombia's peso surged 1%, poised for its biggest

single-day climb in over a month and was trading close to over a

two-month high.

The Colombian currency's gains came on the back of climbing

crude prices fueled by intensifying geopolitical tensions.

In Buenos Aires, Argentina's Merval index notched a

near 1% gain, poised to break a five-session losing streak.

Elsewhere, Ukraine's international bonds dipped, as

persistent geopolitical friction between Moscow and Kyiv cast a

long shadow, eclipsing the fleeting optimism from a second round

of peace talks.

South Korea's liberal party candidate Lee Jae-myung was

elected president in Tuesday's snap election, after he evaded

military cordons to vote against a shock martial law decree

imposed by his ousted predecessor.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1157.61 0.33

MSCI LatAm 2239.33 0.50

Brazil Bovespa 137458.44 0.49

Mexico IPC 57646.3 -0.1

Argentina Merval 2225473.3 0.869

8

Chile IPSA 8123.88 0.93

Colombia COLCAP 1633.69 1.54

Currencies Latest Daily %

change

Brazil real 5.6387 0.6

Mexico peso 19.2231 -0.04

Chile peso 940.5 -0.22

Colombia peso 4107.5 1.03

Peru sol 3.622 0.08

Argentina peso (interbank) 1184 -0.21

Argentina peso (parallel) 1140 2.19