EMERGING MARKETS-Brazilian assets rally after Bolsonaro edges Lula in new poll

Brazilian stocks and the real rose on Tuesday after a new poll showed improved prospects for right-wing Senator Flavio Bolsonaro in next month's presidential election, while higher commodity prices lifted assets across Latin America. A Nexus poll commissioned by BTG Pactual showed Bolsonaro holding a narrow lead over left-wing President Luiz Inacio Lula da Silva in a simulated second-round runoff for next month's election. Brazil's first-round vote is scheduled for October 4, with a runoff, if required, set for October 25. Recent polls have shown Bolsonaro steadily narrowing the gap with Lula, keeping the election outcome at the center of investors' focus amid concerns over deteriorating public finances. Investors broadly view Bolsonaro as the more market-friendly candidate. The benchmark Bovespa climbed 1.3%, while the real strengthened 0.7% against the dollar. "There is some still political risk in Brazil, but it has very high carry and strong commodities. Those two, mostly dominated in terms of just attracting investor capital into these markets," said Lale Akoner, global market strategist at eToro. "Much of the macro drivers are aligning well in terms of boosting these markets right now." Mexico's equities advanced 0.5%, while the peso was little changed. A Reuters poll published on Monday showed headline inflation likely accelerated in August for the first time in five months, though underlying price pressures continued to ease. The data is expected on Wednesday. "The recent patch of soft inflation in Mexico is unlikely to be sustained," said Kimberley Sperrfechter, senior emerging markets economist at Capital Economics. "With Banxico likely to raise its inflation forecasts substantially as the Fed shifts toward rate hikes, the balance of probabilities is tilted toward further monetary tightening in Mexico." Key Latin American stock indexes and currencies at 1945 GMT: | Stock indexes | Latest | Daily % change | | --- | --- | --- | | MSCI Emerging Markets | 1753.42 | -0.2 | | MSCI LatAm | 3199.62 | 1.42 | | Brazil Bovespa | 187632.09 | 1.34 | | Mexico IPC | 65018.05 | 0.45 | | Chile MSCI index | 1703.81 | 0.37 | | Argentina MerVal | 3073026.56 | 1.27 | | Colombia COLCAP | 2574.59 | 0.35 | | Currencies | Latest | Daily % change | | --- | --- | --- | | Brazil real | 5.0882 | 0.74 | | Mexico peso | 16.9104 | -0.07 | | Chile peso | 924 | 1.03 | | Colombia peso | 3108.17 | 0.25 | | Peru sol | 3.3528 | 0.14 | | Argentina peso (interbank) | 1,511.5 | 0.07 | | Argentina peso (parallel) | 1,525.0 | 1.29 | The broader MSCI index tracking LatAm equities rose 1.4%, while the regional FX index gained 0.5%. Oil, an important export for several Latin American economies, held near six-week highs after Iran-backed Houthi forces attacked Saudi energy facilities. The attacks heightened concerns that a wider conflict in the Gulf could disrupt global fuel supplies. In Chile, stocks rose 0.4%, following copper prices to record highs. The country is the world's largest copper producer. The peso appreciated 1% to a near two-week high. Data showed Chilean consumer prices rose 0.6% in August from the previous month, pushing annual inflation to 4.1% from 3.5% in July and above the central bank's 2%-4% target range. Investors awaited the central bank's rate decision later in the day, with policymakers widely expected to keep rates unchanged at 4.5%. Peru's stock index, also supported by higher copper prices, added 0.7%. In Colombia, consumer prices rose 0.39% in August, data showed on Monday, taking annual price growth to 6.24%, which remains well above the central bank's target range of 3% plus or minus one percentage point. Equities in Bogota rose 0.4%, while the peso rose 0.3%. Both were on track for a sixth straight session of gains.

EMERGING MARKETS-Brazilian assets rally after Bolsonaro edges Lula in new poll

Brazilian assets rise after new poll

Mexico market moves and closing levels

Latin American markets track commodities and inflation data

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Stock indexes	Latest	Daily % change
MSCI Emerging Markets	1753.42	-0.2
MSCI LatAm	3199.62	1.42
Brazil Bovespa	187632.09	1.34
Mexico IPC	65018.05	0.45
Chile MSCI index	1703.81	0.37
Argentina MerVal	3073026.56	1.27
Colombia COLCAP	2574.59	0.35

Currencies	Latest	Daily % change
Brazil real	5.0882	0.74
Mexico peso	16.9104	-0.07
Chile peso	924	1.03
Colombia peso	3108.17	0.25
Peru sol	3.3528	0.14
Argentina peso (interbank)	1,511.5	0.07
Argentina peso (parallel)	1,525.0	1.29