EMERGING MARKETS-Latam stocks, forex gain against dollar as investors eye Fed clarity

* Brazil economists see 2023 inflation within target range * Venezuela reach deal to ease sanctions, open elections – report * Casino, GPA agrees initial deal to sell stake in Exito Group * Latam stocks up 1.3%, FX up 0.5% (Updated at 3:45pm ET/1945 GMT) By Johann M Cherian and Lisa Pauline Mattackal Oct 16 (Reuters) – Latin American equities gained on Monday, with a rise in most regional indexes, and currencies in the region turned higher against the dollar, as investors remained alert over the Middle East conflict. MSCI’s gauge of Latin American stocks added 1.3% while Latin American currencies reversed losses to rise 0.5% against the dollar. Brazil’s Bovespa index and Mexico’s benchmark index both rose 0.9%. Investors are awaiting speeches from Federal Reserve policymakers this week to judge the trajectory of U.S. interest rates, while also watching Middle East developments and their potential impact on oil prices. “U.S. bond market volatility has had a significant impact on Brazilian & Mexican markets, those markets’ vulnerability to continued uncertainty about Fed policy will persist,” TS Lombard analysts wrote in a note. The Brazilian real advanced nearly 1% after a central bank poll showed private sector economists now expect the country’s inflation to end 2023 at the upper limit of its target range of 4.75%, and its central bank director reiterated the bank’s consensus on the current pace of interest rate cuts. “The central bank, as I see it, is still quite unlikely to move away from their current pace of cuts,” said Juan Manuel Herrera, senior economist and strategist at Scotiabank. Separately, shares of Brazilian retailer GPA jumped 9.2% after the local retailer announced that its board of directors also approved the sale of its remaining stake in Éxito to Grupo Calleja. Mexican peso was also among the region’s top gainers, adding 0.9%, while Chile’s peso dipped 0.6%. Colombia’s peso inched 0.1% lower in thin offshore trading as local markets were closed for a public holiday. Elsewhere in the region, the Biden administration agreed to ease U.S. sanctions on Venezuela’s oil industry if Venezuela would allow a “competitive, internationally monitored” presidential election in 2024, the Washington Post reported. Over the weekend, business heir Daniel Noboa won Ecuador’s presidential election, boosting the country’s bonds. In other emerging markets, Israel’s shekel weakened further, touching four per U.S. dollar for the first time since 2015. Poland’s currency and stock market rallied as former European Council President Donald Tusk looked to be in pole position to be the country’s next leader. Key Latin American stock indexes and currencies at 1945 GMT: Stock Indexes Latest Daily % change MSCI Emerging Markets 947.47 -0.4 MSCI LatAm 2258.30 1.37 Brazil Bovespa 116807.78 0.91 Mexico IPC 49819.52 0.89 Chile IPSA 5853.21 1.31 Argentina MerVal 760673.75 6.159 Colombia COLCAP 1116.29 0.38 Currencies Latest Daily % change Brazil real 5.0350 1.05 Mexico peso 17.8975 0.92 Chile peso 947.4 -0.69 Colombia peso 4240 -0.13 Peru sol 3.8484 -0.06 Argentina peso 350.0500 0.01 (interbank) Argentina peso 960 5.21 (parallel) (Reporting by Johann M Cherian in Bengaluru; Editing by Richard Chang)