Peru's sol sinks as socialist presidency looks likely; Petrobras rallies
* Citi downgrades Peru to "market weight"
* Window for a recovery Colombian peso fading - JPM
* New Petrobras CEO seeks to maintain previous pricing policy
* Braskem jumps on M&A speculation
* EM assets set for lift after choppy start to 2021 - Blackrock (Updates prices)
By Susan Mathew
April 19 (Reuters) - Peru's sol posted its worst session in five months on Monday after the first poll ahead of a June presidential run-off election indicated a socialist win, while most other Latin American currencies rallied as the dollar declined sharply.
The sol PEN= lost 1% after Sunday poll from Ipsos Peru showed Pedro Castillo, the surprise winner of the first round vote earlier this month, in pole position to win the presidency in June, showing him with 42% support against 31% for right-wing rival Keiko Fujimori.
"Fujimori's path to bridge the gap will not be easy due to her high rejection rate. We believe this opens the space for further negative repricing in Peruvian assets," said strategists at Citi Research.
"We move Peru back to market weight."
Colombia's peso COP= fell after three straight days of gains. Ratings agency Fitch on Monday said Colombia's $6.4 billion tax reform, sent to Congress last week, is key for the country's bonds to retain investment grade.
"Our concern is that the window for a COP recovery is fading as the debate domestically switches to fiscal reform, amid investor concerns over the country's twin deficits," analysts at JPMorgan said in a note.
"If anything, risks are skewed toward the reform being watered down over the coming month, which will present another headwind for COP outperformance."
As the greenback .DXY decline against most rivals, Brazil's real BRBY BRL= gained for a fifth straight session - its longest winning streak in almost a year, while Mexico's peso MXN= notched three-month highs.
Data on Monday showed Mexico's economy shrank by more than 2% in March, but analysts expect a rebound in subsequent months.
As copper scaled decade highs, top producer Chile's peso CLP= tacked on 0.4%. Rising copper prices have made Chile's currency one the best performing Latam units so far this year, up 1.6% compared to a 6.4% drop for Brazil's real.
The BlackRock Investment Institute said on Monday the economic restart, stabilising U.S. Treasury yields and relatively cheap valuations will boost EM assets after a choppy start to 2021.
With Wall Street's main indexes declining, most Latam bourses fell with Brazil's Bovespa stocks index .BVSP breaking a five-day winning streak.
But oil major Petrobras PETR4.SA jumped 6% after its new chief executive said he sought to maintain policies of the previous administration, including pricing policy, which generally won market plaudits.
Brazilian petrochemical producer Braskem BRKM5.SA rallied 4.7% on speculation of a potential sale of the company.
Key Latin American stock indexes and currencies: Stock indexes
Latest Daily %
change MSCI Emerging Markets
Latest Daily %
change Brazil real
Colombia peso COP=
Reporting by Susan Mathew and Ambar Warrick in Bengaluru; editing by Jonathan Oatis and Alistair Bell
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.