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MSCI Latam FX up 0.4%, stocks soar 1.6%

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Dollar, oil dip on Israel-Iran ceasefire

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Mexican headline inflation rises in June

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Brazil signals potential rate hike pause

(Updates with mid-session prices)

By Purvi Agarwal, Ragini Mathur and Pranav Kashyap

June 24 (Reuters) -

Latin American currencies and stocks rebounced on Tuesday,

buoyed by relief after U.S. President Donald Trump announced a

ceasefire between

Israel and Iran

, easing investor jitters from a turbulent 12-day conflict.

Markets welcomed the pause in regional tensions, as Israeli

stocks rallied 1.5% and the shekel surged 1.3%

to a two-year high against a weakening dollar. Israeli dollar

bonds also advanced across the board.

Momentum spread across the Middle East, with Turkey's stocks

climbing 3.5%, while Saudi Arabia's benchmark

posted a 2.4% gain and its dollar bonds edged higher.

"The focus will be on whether the ceasefire can hold ...

this is still a fluid situation," said Kathleen Brooks, research

director at XTB.

"Stocks are moving higher on news of a ceasefire between

Iran and Israel and the idea that this will remain a short-lived

war, rather than a long and drawn out conflict," said Chris

Brigati, chief investment officer, SWBC.

Investors took on risk, selling off the dollar that

dipped 0.4% and provided some lift to most EM currencies.

MSCI's index for regional currencies rose

0.4%, set for its biggest single-day jump in a week, while the

regional stock gauge leapt 1.7%, poised for its

first win in six sessions.

The currency in Chile, the world's largest copper

producer, gained 1.3%, tracking copper prices at two-week highs.

The peso had logged a sharp fall on Monday.

Meanwhile, the International Monetary Fund urged structural

reforms to revive Chile's economic growth.

In Mexico, the peso strengthened 0.6% and stocks

rose 1.1%. Fresh data showed headline inflation rising as

expected in the first half of June, bolstering bets that the

central bank will continue trimming interest rates.

Analysts surveyed by Reuters see Banxico delivering another

50 basis point rate cut on Thursday, but the bank faces a tricky

path as inflation races ahead of its 3% target.

Beneath the surface, Mexico's economy narrowly avoided a

technical recession in the first quarter and now contends with

soft domestic demand and anxiety over U.S. trade policy.

Meanwhile, Mexico's government took steps to shore up its

finances, executing a $6.8 billion debt operation in

international markets-slashing its dollar-denominated external

debt due between 2027 and 2031 by 15% and strengthening its debt

profile.

Meanwhile, Brazil's central bank signaled a potential pause

in rate hikes, noting that much of its "particularly quick and

very firm" tightening cycle has yet to take effect.

Brazil's real slipped 0.3% against the greenback,

while its stocks were 0.6% higher.

Colombia's peso edged up 0.2%, buoyed by the weakness

in the dollar, as oil prices fell about 5% on news of the

ceasefire.

This week, investors are also watching for rate decisions

from Argentina and Colombia.

Investors were also digesting debt issuance from several

EMs, including Turkey and Chile, while Barbados announced the

results to its first conventional international bond sale in 15

years, as per a report.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1212.79 2.58

MSCI LatAm 2290.38 1.69

Brazil Bovespa 137316.47 0.56

Mexico IPC 56725 1.12

Argentina Merval 2071986.7 4.798

Chile IPSA 8143.54 1.42

Colombia COLCAP 1669.97 1.35

Brazil real 5.5131 -0.32

Mexico peso 18.9882 0.62

Chile peso 934.78 1.28

Colombia peso 4076.5 0.16

Peru sol 3.578 0.33

Argentina peso (interbank) 1173 -0.09

Argentina peso (parallel) 1195 1.26