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Brazil studies raising taxes without lawmaker approval

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Brazil economists now expect rate hike

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Mexico's contested judicial reform moves to full Senate

vote

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US may get involved in Argentina dispute over YPF judgment

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Latam stocks up 0.4%, FX up 0.2%

(Updated at 1945 GMT)

By Johann M Cherian and Lisa Pauline Mattackal

Sept 9 (Reuters) -

Mexico's peso and stocks rose on Monday, outperforming many

regional peers as most currencies dipped against a firmer U.S.

dollar as investors pushed back bets on a 50 basis point

interest rate cut from the Federal Reserve.

Mexico's main equities index rose 0.1% after data

showed headline inflation in the region's second-largest economy

eased to 4.99% in August, boosting expectations that Banxico

will lower borrowing costs when it meets later this month.

The oil exporter's peso appreciated 0.4% tracking

higher crude prices, and rebounded from losses logged in the

previous three weeks. Still, the currency was not far from a

more than one-year low.

The peso has been hit over the past several weeks by worries

about the impact of a highly contentious judicial reform

proposal. Senators on Sunday backed the proposal at the

commission stage and it is expected to be voted on later in the

week.

"Mexico's Senate has not passed the constitutional bill

yet, but it may do so this week," said Thierry Wizman, Global FX

& Rates Strategist at Macquarie.

"No one really knows what will happen, and we're

reserving judgement on where the MXN may go until we get

clarity."

Brazil's real rose 0.3% ahead of an inflation report

due later in the week, reversing earlier losses.

A weekly

central bank survey

found Brazilian economists now anticipate a rate hike at

this month's monetary policy meeting.

Sources said the government is considering tax hikes that do

not require congressional approval to balance this year's

budget.

Most Latin American currencies slipped against a firmer

greenback, as investors scaled back expectations for an outsized

50-basis point rate cut by the Federal Reserve ahead of a U.S.

inflation report later in the week.

Colombia's peso dipped 1.5% after Friday data showed

consumer prices rose less than expected in August, while Chile's

peso and Peru's sol dipped 0.1% and 0.4%.

Mexican peso gains lifted MSCI's index tracking Latin

American currencies 0.2%. On the equities front

an index tracking regional bourses added 0.4%.

Brazil's Bovespa gained 0.1% aided by a rise in

energy stocks, Colombian stocks fell 0.5% and

Argentina's MerVal index climbed 1%.

Among single stocks, shares of Mexican retailer La Comer

jumped 5.5% after the S&P Dow Jones said the

stock would be preliminarily included in its S&P/BMV IPC index

as part of a reshuffle.

YPF fell 1.3% after the U.S. government said it

may get involved in a dispute over whether Argentina should give

up its 51% stake in the oil and gas company to help satisfy a

$16.1 billion court judgment.

Argentina's central bank sold $165 million to intervene in

the forex market, traders told Reuters.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1063.42 -1.07

MSCI LatAm 2201.01 0.42

Brazil Bovespa 134751.06 0.13

Mexico IPC 51146.54 0.12

Chile IPSA 6232.58 -0.21

Argentina Merval 1739188.2 1.018

2

Colombia COLCAP 1321.67 -0.51

Brazil real 5.5814 0.31

Mexico peso 19.8906 0.39

Chile peso 944.33 -0.08

Colombia peso 4240.94 -1.51

Peru sol 3.7988 -0.39

Argentina peso (interbank) 957.5 -0.104438

642

Argentina peso (parallel) 1250 0.8