Brazil markets slump as pension reform odds fade

Brazil markets slump as pension reform odds fade
(Updates prices)
By Bruno Federowski
SAO PAULO, Dec 7 (Reuters) - Brazilian markets fell on
Thursday after President Michel Temer's administration failed to
gather enough support from lawmakers to put a pension overhaul
plan to a vote.
A senior lawmaker said on Wednesday that the government's
coalition expected to have enough votes later that day to pass
the bill, which investors see as crucial to curbing public debt.
But a failure to do so led policymakers to put off a
decision, originally planned for Wednesday, to formally schedule
the vote, suggesting that the administration might have
overestimated its clout in Congress.
"The market is anticipating that the pension reform will not
be voted this year," said Coinvalores brokerage head of strategy
Paulo Nepomuceno.
Delaying the vote on the unpopular measure to 2018 would put
it close to next year's elections, a move most investors see as
reducing its likelihood of approval.
The Brazilian real weakened 0.14 percent, while the
benchmark Bovespa index fell more than 1 percent.
Other Latin American currencies mostly weakened due to
expectations that the United States will push through a tax
U.S. Senate Republicans agreed to talks with the House of
Representatives on sweeping tax legislation on Wednesday, amid
early signs that lawmakers could bridge their differences and
agree on a final bill ahead of a self-imposed Dec. 22 deadline.

The tax plan could boost economic growth and inflation,
prompting the Federal Reserve to raise interest rates at a
faster-than-expected pace in coming months. Higher U.S. rates
tend to drain funds away from emerging markets.

Key Latin American stock indexes and currencies at 2101 GMT:

Stock indexes daily % YTD %
Latest change change
MSCI Emerging Markets 1100.26 -0.08 27.71

MSCI LatAm 2696.37 -1.59 17.06

Brazil Bovespa 72487.46 -1.07 20.36

Mexico IPC 46981.22 0.02 2.93

Chile IPSA 4887.16 -0.02 17.72

Chile IGPA 24616.07 0.01 18.72

Argentina MerVal 26841.50 1.4 58.66

Colombia IGBC 10901.02 0.53 7.63

Venezuela IBC 1335.06 -1.43 -95.79

Currencies daily % YTD %
change change
Brazil real 3.2901 -0.14 -1.24

Mexico peso 18.9670 -0.52 9.37

Chile peso 655.6 -0.34 2.30

Colombia peso 3010.2 -0.14 -0.29
Peru sol 3.235 -0.03 5.53

Argentina peso 17.2750 -0.12 -8.10

Argentina peso 17.83 0.67 -5.66

(Reporting by Bruno Federowski; Editing by Lisa Von Ahn and
Meredith Mazzilli)

First Published: 2017-12-07 02:06:53
Updated 2017-12-07 23:05:50

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