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EM stocks down 0.54%, FX up 0.57%

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Grupo Mexico shares crash after Banamex bid

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Mexico's key inflation data later in the week

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Peru's rate decision this week

By Nikhil Sharma

Oct 6 (Reuters) - Latin American currencies rose on

Monday, while stocks fell, kicking off the week on a mixed note

as investors braced for a slate of regional data due later this

week.

MSCI's index for Latin American stocks fell

0.54%, while a parallel gauge for currencies

advanced 0.57%.

Mexico's local equity index led the equity decline,

tanking 2.3% - set for its worst day since April 29, dragged by

miner Grupo Mexico which sank 18.4% after

launching a $9.3 billion bid for Citi's retail unit in the

country, Banamex.

Local markets braced for key inflation data later this week,

with annual price growth expected to accelerate to 3.8%, but to

remain within the central bank's target band of 3%, plus or

minus one percentage point.

The Brazilian real was up 0.3%, while Sao Paulo's

main stock index fell 0.37% to commence a data-packed

week. The country's trade balance data is due later in the day.

A key highlight will be the country's inflation data later

this week, which is estimated to show inflation climbing to

5.22% in September on a year-over-year basis, above the central

bank's target of 3%, with a tolerance band of 1.5 percentage

points in either direction.

"We shouldn't really see any large uptick in inflation.

Obviously, if we do, then that could be a cause for a rethink,

but at the moment, we think that the growth situation will be

the deciding factor on the monetary policy outlook," said Jon

Harrison, managing director of EM Macro Strategy at TS Lombard.

Last month, the central bank had parked its key benchmark rates

on hold at a near two-decade high of 15% and projected multiple

such pauses ahead in a bid to tame inflation. But the sky-high

borrowing costs have started to show cracks in the domestic

economy.

Peruvian stocks were up 0.4% to claim

another record peak, while local currency sol advanced

0.34% in limited trading volumes.

Investors positioned themselves for an interest rate

decision later this week, amid expectations that the central

bank will keep rates on hold at 4.25%.

Argentina's markets are expected to draw investors with

potentially wild swings as the October midterms approach, with

worries mounting over the feasibility of President Javier

Milei's austerity agenda after a bruising loss in last month's

provincial elections.

Markets have struggled to hold gains from a U.S. pledge of

fiscal support, including a $20 billion credit swap with the

central bank, and U.S. President Donald Trump is slated to meet

Milei on October 14.

The local peso lost 0.32%, while the main equity

index dropped more than 1%.

Elsewhere, officials from Israel and Hamas were in an

Egyptian resort on Monday to launch talks that the U.S. hopes

will end the Gaza conflict and free the hostages.

Israel's shekel rose 0.5% to a more than three-year

high, while its international bonds remained slightly lower.

Separately, Turkey's state-controlled Halkbank

tumbled 7.2% after the U.S. Supreme Court declined to hear its

latest appeal over charges it helped Iran evade U.S. sanctions.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1369.75 -0.3

MSCI LatAm 2491.09 -0.54

Brazil Bovespa 143665.47 -0.37

Mexico IPC 60570.21 -2.28

Chile IPSA 8887.68 -0.03

Argentina MerVal 1786467.51 -1.03

Colombia COLCAP 1858.3 -0.16

Currencies Latest Daily % change

Brazil real 5.3216 0.29

Mexico peso 18.3645 0.09

Chile peso 961.83 0.36

Colombia peso 3848.15 0.51

Peru sol 3.4485 0.34

Argentina peso (interbank) 1,429.5 -0.32

Argentina peso (parallel) 1,420.0 2.07