EMERGING MARKETS-Mexican peso gains after temporary U.S. tariff exemption; global bonds slump

By Shashwat Chauhan and Purvi Agarwal

March 6 (Reuters) - The Mexican peso led gains among Latin American currencies on Thursday as investors cheered a one-month U.S. tariff exemption for the country, while the global debt market saw heavy selling amid the flurry of global shake-ups.

Mexican goods covered by a North American trade pact will be exempted for a month from the 25% tariffs that U.S. President Donald Trump imposed earlier this week, after a call between the countries' leaders.

This follows comments from the U.S. Secretary of Commerce Howard Lutnick through the week, which led investors to hope that the tariffs will not be as stringent as previously thought, leaving room for negotiations.

The Mexican peso MXN= gained 0.7% against the dollar, on track for its third session of gains. Stocks .MXX were up 0.2%.

"This does provide some relief for the peso and equities after some volatility in recent weeks. But we're going to see another month of the same kind of uncertainty before the April 2nd deadline," said Tettey Addy, emerging markets economic analyst at abrdeen.

If sustained, U.S. tariffs imposed on Mexico and Canada will have a significant adverse impact on those countries, the International Monetary Fund said.

Addy pointed that worsening consumer confidence in the U.S. and a shift in expectations for the Federal Reserve's interest rate path could have "deterred (the U.S. administration) from going ahead as forcefully as they seemed to be talking up."

On the flip side, EM debt joined a global bonds sell-off, with international bonds in Ukraine, Egypt, Nigeria and Senegal, among others, tumbling close to 1 cent on the dollar.

El Salvador followed the trend. The Central American nation announced more purchases of bitcoin on Wednesday, taking the total in the country's strategic reserve to above 6,102 coins.

Global bond markets ran into turbulence this week with German long-dated maturities at the forefront of the sell-off as parties in talks to form Germany's new government agreed to try to loosen fiscal rules.

Back in LatAm, Brazil's real BRL= fell 0.4% after jumping more than 2% in the last session. Trading has been erratic in the real as Brazilian markets were shut for most of the week for a public holiday.

Continued weakness in the dollar bumped up Colombia's peso COP= 0.2%, while currencies in Peru PEN= and Chile CLP= were slightly lower, after Wednesday's global relief rally following Trump's exemption for automakers for one month under the trade agreement.

MSCI's index for Latin American currencies .MILA00000CUS gained 1.2%, trading around early October levels. The stocks gauge .MILA00000PUS rose 0.9%.

Regional stock indexes were broadly higher, with ones in Chile .SPIPSA and Colombia .COLCAP up 0.5% and 0.3% respectively, while Brazilian stocks were flat.

HIGHLIGHTS

Brazil's fourth-quarter economic growth forecast to have slowed

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Key Latin American stock indexes and currencies: