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Latam stocks up 0.8%, FX up 0.1%

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Argentina plans $1 bln bond that pays out in pesos

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Brazil's inflation rose 0.36% in the month to mid-May

(Updates with mid-session prices)

By Pranav Kashyap and Purvi Agarwal

May 27 (Reuters) - Most Latin American assets advanced

on Tuesday, in-line with global sentiment on trade optimism,

with Brazil's benchmark hitting an all-time high after a batch

of inflation data.

Brazil's stock index hit a record high and was last

up 1%, after data showed inflation decelerated more sharply than

anticipated in the month to mid-May.

This marks the third consecutive deceleration, a testament

to the bite of tight monetary policy, with benchmark interest

rates at their highest levels in nearly two decades.

"The fall ... increases the probability of a hold. Much

hinges on the first-quarter GDP figures out on Friday," said

Kimberley Sperrfechter, emerging markets economist at Capital

Economics.

Top players including Eletrobras and Petrobras

gained about 1% each.

The Brazilian real rose 0.4% against the U.S. dollar.

The central bank held an up to $1 billion auction with a

repurchase agreement.

Argentina's peso reversed gains to fall more than 1%,

while international bonds firmed. The stocks dipped

0.9%, after rising 1% in the previous session.

Argentina announced a $1 billion domestic five-year bond on

Monday, structured to attract international investors, who will

subscribe in U.S. dollars and receive coupon payments and

principal in Argentine pesos.

Investor confidence in Argentine assets has been on a steady

incline, particularly after the nation secured a $20 billion

loan program with the International Monetary Fund in April.

Argentina has also dismantled significant currency and

capital controls, permitting the peso to fluctuate more freely

within a managed band.

These moves are central to libertarian President Javier

Milei's agenda, who has aimed to lure back international

investors and extricate the nation from a deep-seated economic

crisis, ahead of the legislative elections due in October.

MSCI's gauge for the region's equities

jumped 0.8% to its highest level since September, while an index

for currencies ticked up 0.1%.

In Mexico, the peso reversed early gains to fall

slightly and the local stock market gained 0.2%. The

nation prepares for its first judicial elections this Sunday,

where voters will select federal judges and magistrate roles, a

slate that includes all Supreme Court justice positions.

"The impact of this profound structural reform is difficult

to predict... However, the consequences could weigh on

investment decisions in the medium term, at least until there is

clarity of the consequences of the implementation of the new

judiciary power," said analysts at Citigroup.

A broader wave of positive sentiment buoyed Latin America,

relating to U.S. President Donald Trump's announcement of a

postponed deadline for threatened tariffs on the European Union.

The region's currencies also caught a tailwind from a

weakening U.S. dollar as concerns lingered regarding Trump's

proposed sweeping tax and spending bill, now navigating the

Senate, and its potential to swell the already mounting debt

burden of the world's largest economy.

The dollar index was heading for a fifth straight

month of declines against a basket of currencies, which would

mark the longest such losing streak since 2017.

Elsewhere in the region, the Chilean peso rose 0.2%

and the Colombian peso advanced 1.1% to its highest level

in more than a month.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1163.39 -0.58

MSCI LatAm 2275.2 0.78

Brazil Bovespa 139510.34 0.99

Mexico IPC 58565.59 0.18

Chile IPSA 8349 -0.49

Argentina Merval 2350084.7 -0.87

6

Colombia COLCAP 1640.98 -0.72

Currencies Latest Daily %

change

Brazil real 5.6473 0.38

Mexico peso 19.2504 -0.04

Chile peso 936.93 0.15

Colombia peso 4106.74 1.05

Peru sol 3.639 0.36

Argentina peso (interbank) 1156 -1.04

Argentina peso (parallel) 1145 2.18