EMERGING MARKETS-Most Latam FX slide as commodity prices weigh; Central European currencies outperform

(Updates prices) By Susan Mathew and Devik Jain Nov 16 (Reuters) – Most commodity-linked Latin American currencies fell against the dollar on Wednesday as oil and copper prices slid on concerns about Chinese demand, although central European units outperformed on easing tensions over missile hit in Poland. Brazil’s real was volatile, last down 1.5%. Citi strategists await Brazil’s President-elect Luiz Inacio Lula da Silva’s fiscal easing plan, which local reports say could be revealed later in the day. The market will focus on the size of the waiver of the spending cap, the duration and the funding. Leftist former Sao Paulo Mayor Fernando Haddad is emerging as the front-runner to be Brazilian finance minister, three sources said, although they added no decision has yet been made. A Haddad appointment would likely be seen by investors as the latest sign that Lula appears to be elevating leftist allies over centrists in formulating his government-in-waiting’s economic policy. The space for applying “unorthodox policies” in Brazil is limited and the market will punish unusual economic experiments, the chief economist of Swiss bank UBS, Paul Donovan, said in an interview with newspaper Valor Econômico published on Wednesday. Currencies of copper exporter Chile and oil exporter Colombia dipped 2.8% and 1.9%, respectively. Colombia’s leftist government is considering how to change the distribution of royalties from extractive projects to more quickly benefit communities, the country’s energy minister said on Wednesday. The Mexican peso firmed around 0.3% and has gained 6% so far this year, outperforming its regional peers. “(For 2023) we prefer the Mexican peso to Brazilian real exposure, given that the real trades on nearly twice the volatility as the peso,” Chris Turner, global head of markets at ING, said in a note. “Mexico also looks much better placed in terms of debt, and its higher sovereign rating should provide some protection in the face of deteriorating external conditions.” Meanwhile, Poland’s zloty rallied 0.9%, recovering almost all its losses over the last two sessions, while Hungary’s forint rose 0.5% against a stronger euro . Fears of war spillover across the border eased after Poland and military alliance NATO said a missile that crashed inside Poland was probably a stray fired by Ukraine’s air defences and not a Russian strike. The mood on Wall Street soured over a bleak sales outlook from Target, giving most Latin American stocks their cue. Brazil’s Bovespa led declines, down 2.7%. Argentina’s currency slipped again. Ratings agency Moody’s said Argentina’s rising central bank debt poses a risk to the country’s monetary stability. Key Latin American stock indexes and currencies by 1957 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 951.86 -0.91 MSCI LatAm 2192.11 -2.43 Brazil Bovespa 110125.54 -2.68 Mexico IPC 51623.79 -0.06 Chile IPSA 5230.45 -0.17 Argentina MerVal 153895.40 -0.814 Colombia COLCAP 1279.82 -0.43 Currencies Latest Daily % change Brazil real 5.3808 -1.48 Mexico peso 19.3105 0.23 Chile peso 910.9 -2.77 Colombia peso 4936 -1.88 Peru sol 3.835 -0.62 Argentina peso (interbank) 162.4500 -0.20 Argentina peso (parallel) 304 -0.66 (Reporting by Susan Mathew and Devik Jain in Bengaluru; editing by Barbara Lewis and Nick Zieminski)