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Transport, food drive Brazil's November inflation rise of 0.41%

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Peru president open to early election talks

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Brazil's Lula names ex-Sao Paulo mayor Haddad as FinMin

By Susan Mathew and Bansari Mayur Kamdar

Dec 9 (Reuters) - Brazil's real cut a chunk of its session losses on Friday after President-elect Luiz Inacio Lula da Silva announced Fernando Haddad as his finance minister, while broader markets were cautious after data showed strong U.S. inflation.

The real BRBY BRL= was last down 0.3%, after falling as much as 1.4% during the session.

Lula, who is set to take office in January, also announced other cabinet picks after appointing former Sao Paulo Mayor Haddad, ending days of speculation about his ministerial appointments. The choice of Haddad was in line with expectations.

Haddad can be portrayed as a pragmatic politician given his educational qualification and political experience, said Mauricio Une, head of South America macro strategy at Rabobank.

"I believe the market would now like to understand who Haddad will invite into his ministry and help him design economic policies."

The real's move helped it pare weekly losses to below 1%. It had jumped 3.6% last week.

Data showed Brazil's consumer prices rose 0.41% in November, below market forecasts of 0.53%.

"Brazil is the world's #1 disinflation success story," said Natalia Gurushina, emerging markets fixed income economist at VanEck, in a note.

Some other emerging market currencies fell, with South Africa's rand ZAR= and Mexico's peso MXN= down about 0.9% each as the dollar cut losses after the U.S. Labor Department reported that producer prices rose more than expected last month on an annual basis.

This increased hawkish anticipation for the Federal Reserve's much anticipated meeting next month where bets are that the Fed would opt for a smaller interest rate hike following four 75 basis point hikes. FEDWATCH

Mexico's peso is on course for a drop of nearly 2% on the week, in what could be its sharpest decline in four months.

Top copper producer Chile's peso CLP= added 0.3% against the dollar, supported by firm copper prices as investors anticipated that China's easing of coronavirus restrictions will boost economic growth and metals demand.

Peruvian markets were closed. President Dina Boluarte said she was willing to discuss early elections with the country's political and civil organizations, but ruled out kick-starting constitutional changes for the time being.

Latam stocks .MILA00000PUS fell 0.4% on Friday and were down 3.4% for the week, sharply underperforming their broader EM peers.

However, Brazil's Bovespa .BVSP jumped 0.6% with materials being the biggest boost.

Key Latin American stock indexes and currencies:

Stock indexes

Latest

Daily %

change MSCI Emerging Markets .MSCIEF

978.17

0.92 MSCI LatAm .MILA00000PUS

2149.94

-0.39 Brazil Bovespa

.BVSP

107792.18

0.51 Mexico IPC

.MXX

50686.95

-0.77 Chile IPSA

.SPIPSA

5170.88

-0.63 Argentina MerVal

.MERV

171177.89

1.837 Colombia COLCAP

.COLCAP

1237.55

0.64

Currencies

Latest

Daily %

change Brazil real

BRBY

5.2452

-0.59 Mexico peso

MXN=D2

19.7776

-0.83 Chile peso

CLP=CL

860.9

0.48 Colombia peso COP=

4804.85

0.21 Peru sol

PEN=PE

3.8426

0.17 Argentina peso (interbank)

169.8700

-0.22 ARS=RASL

Argentina peso (parallel)

312

0.96 ARSB=

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BRAZILIAN REAL UNDERPERFORMS LATAM PEERS THIS YEAR Link

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Reporting by Susan Mathew and Bansari Mayur Kamdar in
Bengaluru; Editing by Barbara Lewis and Richard Chang