(Updated at 10:30 a.m. ET/ 1430 GMT)

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Brazil's Petrobras jumps after MS upgrade

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Mexico's ruling bloc confirmed supermajority in lower

house

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Latam stocks up 0.7%, FX off 0.1%

By Shashwat Chauhan

Aug 26 (Reuters) - Most Latin American currencies

slipped after spiking in the last session on Monday, as the

dollar regained some footing after hitting multi-month lows last

week, while Mexico's peso lagged after ruling party Morena

secured a supermajority in parliament.

Mexico's peso slipped almost 1% to 19.2775 per dollar

after rising more than 2% in the last session, as investors

remained wary of local political developments.

Mexico's electoral authority late on Friday confirmed that

ruling party Morena and its allies will hold a two-thirds

supermajority in the lower house but fall just short of that

level in the Senate when the new legislative term begins in

September.

The Morena party intends to approve the first part of a

series of constitutional changes proposed by outgoing President

Andres Manuel Lopez Obrador for the period starting Sept. 1.,

including a controversial reform of the judiciary that would

allow judges and magistrates to be elected by popular vote, a

move that has rattled markets.

"The MXN has been buffeted by the prospect of passage of

Mexico's judicial reform, and those worries won't fade soon,"

said Thierry Wizman, global FX & rates strategist at Macquarie.

"(However), we won't concede to the panic until we see if

the reform is actually passed."

Brazil's real was flat at 5.4918 per dollar after

jumping 1.7% in the previous session, while Colombia's peso

held firm at 4019.87 per dollar after rising more than 1%

on Friday.

Copper producer Chile's peso ticked 0.3% higher as

prices of the red metal rose, supported by a rebound in demand

in China and on hopes of a U.S. rate cut in September.

Most emerging market currencies surged in the last session,

while the dollar sagged, after Federal Reserve Chair

Jerome Powell on Friday said "the time has come" to lower

interest rates, endorsing an imminent start to the U.S. policy

easing cycle at the economic symposium at Jackson Hole.

The dollar index perked up 0.1%, pressuring Latin American

currencies.

Speaking at the same event, Brazil's central bank chief said

on Saturday that discussing monetary policy transmission will

become increasingly difficult without addressing fiscal issues.

Amongst equities, Brazil's Bovespa added 0.9%,

boosted by jump of about 5% jump in state-owned oil firm

Petrobras after brokerage Morgan Stanley upgraded its

rating.

Adding to gains were elevated crude oil prices, which spiked

on reports of a near total production stoppage in Libya.

MSCI's index for emerging markets stocks

rose 0.7%, while a gauge for currencies edged

0.1% lower.

Global markets remained on edge after militant group

Hezbollah launched hundreds of rockets and drones at Israel

early on Sunday, as Israel's military said it struck Lebanon

with around 100 jets to thwart a larger attack, in one of the

biggest clashes in more than 10 months of border warfare.

HIGHLIGHTS

** S&P downgrades Kenya's rating to 'B-' on weaker fiscal

and debt trajectory

** Brazil's central bank needs to be more cautious due to

strong economy, director says

Key Latin American stock indexes and currencies:

Equities Latest Daily % change

MSCI Emerging Markets 1104.24 0.32

MSCI LatAm 2308.04 0.66

Brazil Bovespa 136888.96 0.94

Mexico IPC 53714.51 0.42

Chile IPSA 6477.23 0.22

Argentina Merval 1618184.2 0.698

5

Colombia COLCAP 1335.89 0.37

Currencies Latest Daily % change

Brazil real 5.4918 -0.1

Mexico peso 19.2775 -0.96

Chile peso 905.75 0.25

Colombia peso 4019.87 0.04

Peru sol 3.7505 -0.7

Argentina peso (interbank) 948 -0.158227848

Argentina peso (parallel) 1330 1.503759398