EMERGING MARKETS-LatAm FX steady, stocks higher on US rate cut hopes, Ukraine in focus

By Purvi Agarwal

Nov 24 (Reuters) - Latin American currencies were mixed on Monday, while stocks were broadly higher as they recovered from last week's declines, with progress on a Ukraine peace deal in focus.

The MSCI index tracking Latin American currencies .MILA00000CUS gained 0.3%, while the stock index .MILA00000PUS rose 0.7%.

On Friday, both had marked their steepest weekly declines since July and October respectively, amid a global sell-off in risk assets.

Comments by New York Federal Reserve President John Williams on Friday boosted bets of a December U.S. interest rate cut, with optimism around lower rates lifting global market sentiment on Monday, spilling into Latin America.

Meanwhile, the U.S. and Ukraine sought to narrow gaps in a peace plan to end the war with Russia after agreeing to modify a U.S. proposal. Expectations that a Russia-Ukraine deal was close lifted appetite for Ukrainian assets, sending its international bonds nearly 3 cents higher on Monday.

Ukraine-focused stocks also gained, with London-based miner Ferrexpo FXPO.L soaring 21%.

In Latin America, Brazil's real BRL= was 0.2% higher, while stocks .BVSP gained 0.4%.

The central bank of the region's biggest economy sold $2 billion in an auction with repurchase agreement.

A panel of Brazil's Supreme Court voted on Monday to keep Jair Bolsonaro in police custody, after the ex-president was detained on Saturday.

"There is no change in Bolsonaro's ineligibility situation, but this event is an escalation of uncertainties related to who will run through the right wing in the 2026 election," said Citigroup analysts.

Colombia's peso COP= was up 0.3%. Stocks .COLCAP were down 0.2%, the only outlier among peers. Colombia repurchased over $4 billion in bonds and placed 2 billion euros in global notes, the finance ministry said on Friday.

Mexico's annual inflation rate hit 3.61% in the first half of November, data showed, slightly above expectations of economists polled by Reuters.

"We see inflation allowing for another 25-bps rate cut, reaching a level of 7.00% in the December meeting, but cuts afterwards will be more data dependent," said analysts at Citigroup.

Currencies in Mexico .MXN= and Chile CLP= fell 0.2% and 0.4% respectively, although stocks moved higher.

Meanwhile, a Reuters report said that the U.S. is poised to launch a new phase of Venezuela-related operations. Venezuela rejected the plan as "ridiculous".

Markets in Venezuela and Argentina were closed for public holidays.

Argentina's economy minister said on Friday that officials did not speak with U.S. banks about a $20 billion rescue package.

In October, the U.S. Treasury had reached a $20 billion exchange-rate stabilization agreement with Argentina, to be paired with a bank-led debt facility for the same amount.

Elsewhere, the International Monetary Fund said Poland must prioritize curbing the rapid increase in its public debt.

And Israel's central bank delivered an expected 25 basis point rate cut, its first since January 2024. The shekel ILS= pared some declines to trade 0.1% lower against the dollar.

Key Latin American stock indexes and currencies: