EMERGING MARKETS-Latam FX, stocks rally as U.S. jobs data cools Fed hike bets

* U.S. jobs grew slightly more than expected in August * Reject vote on Chile’s new constitution to sooth market- analyst * Brazil industrial output rises in July from June (Adds details, updates prices throughout) By Shreyashi Sanyal Sept 2 (Reuters) – Latin American currencies and stocks rose at the end of a tumultuous week on Friday after a key jobs report from the United States offered hope that the Federal Reserve may cool off on its aggressive policy tightening cycle. The MSCI’s index for Latin American currencies gained 1.1%, outperforming the broader emerging markets FX index, which was flat. Brazil’s real and Mexico’s peso rose more than 1% each. Data showed U.S. employers hired slightly more workers than expected in August, though the unemployment rate increased to 3.7%, taking some shine off the U.S. dollar and aiding riskier assets. “The headline NFP figure was a little larger than expected at 315,000 which may have created that initial unease as a knockout report could have effectively paved the way for a 75 basis point rate hike this month,” said Craig Erlam, senior market analyst at OANDA. “But once you dig a little deeper, there are aspects of the report that will please the Fed and support the case for easing off the brake.” Latin American stocks rose 2%. Following a lackluster performance in the month of August amid bets of tightening monetary policy by central banks across the world and volatile commodity prices, investors will now focus on the U.S. Federal Reserve’s upcoming meeting in September. Brazilian equity markets rose 0.8% after data showed industrial output rose 0.6% in July from June, slightly below market expectations but enough for it to offset the 0.3% drop seen in the previous month. Brazilian steelmaker Gerdau SA and heavy vehicle parts manufacturer Randon SA rose 3% and 1.5%, respectively, as they announced late on Thursday they have agreed to form a strategic partnership to provide truck and semi-trailer rental services. The Chilean peso rose 1.5%, while stocks in the region added 3% ahead of a historic vote on its new constitution on Sunday. Chileans will choose between sticking with a market-friendly constitution dating back to military dictator Augusto Pinochet or approve a progressive new text that promises to shake up the Andean country’s political and social fabric. “From a market standpoint, the reject option seems to be the preferred one, given all the criticism towards the proposed new constitution,” said Alonso Cervera, managing director at Credit Suisse. “Regardless of the outcome, political uncertainty will likely persist given the strong consensus on the need of a new constitution. This uncertainty is making a complex economic outlook even more complex.” Key Latin American stock indexes and currencies at 1906 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 971.80 -0.44 MSCI LatAm 2168.24 2.05 Brazil Bovespa 111294.96 0.81 Mexico IPC 45944.71 1.24 Chile IPSA 5600.89 3.57 Argentina MerVal 0.00 0 Colombia COLCAP 1233.53 0.78 Currencies Latest Daily % change Brazil real 5.1648 1.41 Mexico peso 19.9589 1.05 Chile peso 882.5 1.52 Colombia peso 4479.45 0.03 Peru sol 3.8715 -0.70 Argentina peso (interbank) 139.0200 -0.21 Argentina peso (parallel) 281 3.20 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Philippa Fletcher and Andrea Ricci)