REFILE-EMERGING MARKETS-Latam assets firm, Argentina peso shines ahead of Trump-Milei meet

By Nikhil Sharma

Sept 23 (Reuters) - Latin American assets firmed on Tuesday, while Argentina's peso extended its climb as investors geared up for a meeting between President Javier Milei and U.S. President Donald Trump to potentially draft a dollar rescue to stabilize the currency.

Argentina's peso ARS=RASL skyrocketed 4.6% after jumping about 4.5% in the previous session, when U.S. Treasury Secretary Scott Bessent signaled "large and forceful" support for Argentina, keeping options such as swap lines and direct currency purchases via the $219.5 billion Exchange Stabilization Fund on the table.

Market attention is now centered on a meeting between Trump and Milei in New York later in the day, which could potentially sway market moves in either direction.

"For the short term, it's certainly good. That's a very big improvement for ARS against the dollar," said Juan Perez, director of trading at Monex.

"But in the long term, we'll see what the commitment actually materializes into."

Argentina's dollar bonds continued their blistering run, with 2030 maturity US040114HS26=TE up 5.5 cents to the dollar. Buenos Aires stocks .MERV, however, held back, falling 2.3% after a mammoth 7.5% surge a day before.

Meanwhile, Argentina's economic activity likely grew 3.3% year-on-year in July, according to analysts polled by Reuters. Official data to be released on Wednesday.

The country's July retail sales data is due later in the day.

On a broader level, MSCI's index for Latin American currencies .MILA00000CUS was up 0.6% to trade near record levels. A gauge of the region's equities .MILA00000PUS climbed over 1%.

Mexico's local equity index .MXX was up 0.25%. Data showed Latin America's second-largest economy shrank 0.9% in July from June and contracted 1.1% from July 2024, underscoring slowdown concerns as interest rates remain high even after several cuts since the start of 2024.

The data precedes Mexico's central bank rate decision on Thursday, with a broader consensus pointing to another moderate cut, taking the benchmark rate to 7.50%.

Separately, retail sales rose 0.1% in July from June and increased 2.4% in July on a year-on-year basis. Mexican peso =MXN was steady.

Brazilian real BRL= added 0.4%, while Sao Paulo's main stock index .BVSP rose 0.7%. In the minutes from its latest policy meeting, where it kept the Selic rate unchanged at a near two-decade high of 15%, the bank said that policymakers would not hesitate to resume a hiking cycle if deemed appropriate..

The Colombian peso COP= rose 0.35% - set to extend gains to the third session. Local equities .COLCAP dipped 0.1%.

The peso of the world's biggest copper producer, Chile CLP=, advanced 0.4%, aided by higher red metal prices. The Santiago stock index .SPIPSA edged 0.14% higher.

Elsewhere, Hungary's central bank left its base rate on hold at 6.5% as expected and suggested tight monetary conditions as it noted elevated inflation levels for the rest of the year.

The Hungarian forint EURHUF= and the main equity index .BUX declined 0.4%, each.

Key Latin American stock indexes and currencies: