EMERGING MARKETS-Latam assets fall amid global risk-off mood; Banxico in focus

By Johann M Cherian and Sukriti Gupta

Nov 20 (Reuters) - Most Latin American stocks fell on Thursday as global sentiment waned after a Nvidia-driven rally lost momentum, while currencies slipped with the strengthening U.S. dollar following a jobs report that clouded prospects of further U.S. interest rate cuts.

Meanwhile, Mexico's peso MXN= wavered as central bank minutes indicated policymakers were willing to take a measured approach to monetary policy easing.

MSCI's index tracking Latin American currencies .MILA00000CUS was little changed, while an index tracking regional stocks .MILA00000PUS fell 0.5%.

"Global sentiment is moving Latin American markets...they cannot escape the ups and downs of global markets, particularly the U.S. stock market. So, it's not a surprise that they are basically synchronizing with the U.S. markets," said Alfredo Coutino, director for Latin America at Moody's Analytics.

U.S. stocks declined as enthusiasm driven by Nvidia's NVDA.O earnings faded, with investors questioning lofty valuations in the technology sector, while uncertainty around the U.S. monetary policy path weighed on investor sentiment.

Data showed U.S. job growth accelerated in September, but the unemployment rate rose to 4.4%, suggesting labor market conditions remained sluggish.

Latin American assets have had a stellar year, with the MSCI stocks index on track for its biggest annual gain since 2009, while the currencies index is poised to log its steepest gain ever.

EMERGING MARKETS GAINED FROM RELATIVELY LOWER U.S. TARIFFS

Risk sentiment got a boost this year from lower U.S. tariff rates for emerging market economies than most other economies, coupled with elections that yielded support for market-friendly candidates in Argentina, Bolivia and Ecuador.

"People are starting to think what 2026 might look like," said Eduardo Ordonez Bueso, an emerging markets debt portfolio manager at BankInvest.

"Everything is so expensive across the board. So it's just about recalibrating and thinking about what is desirable after a strong year's performance."

The U.S. jobs report was delayed due to a prolonged U.S. government shutdown, during which investors and policymakers had little clarity on the health of the world's largest economy and the direction the Federal Reserve could lean at its December meeting.

Thursday's data cemented expectations that the Fed could leave interest rates unchanged.

In Mexico, the focus was on minutes from the central bank's meeting this month, when it cut borrowing costs to their lowest since 2022 and projected further monetary policy easing.

A majority of Mexico's central bank governors pointed to the country's weak economy as an argument for cutting the interest rate despite ongoing concerns about core inflation, minutes from the bank's November meeting showed.

The peso fell 0.3%, while local equities .MXX also declined 0.3%.

Separately, preliminary data showed the Mexican economy was flat in October from a year earlier.

Chile's peso CLP= edged up 0.4%, while the Santiago stock index .SPIPSA fell 0.7%.

Colombia's peso COP= lost 1.1%. The country's fiscal rule committee said the fiscal deficit will total 6.7% of gross domestic product this year, below a 7.1% target. The country's COLCAP Index .COLCAP declined 1.2%.

In Argentina, the local peso ARS=RASL lost 1.3%, while the benchmark stock index .MERV declined 0.6%. According to a Reuters poll, Argentina's economic activity growth likely slowed to 2.2% year-on-year in September, due to uncertainty generated by October's midterm legislative elections.

Brazil markets were closed for a public holiday.

Key Latin American stock indexes and currencies: