EMERGING MARKETS-Latam assets set for fourth month of gains on Fed-cut hopes

By Twesha Dikshit

Nov 28 (Reuters) - Latin American assets climbed on Friday and were on pace for their fourth-straight monthly rise on growing confidence that the U.S. Federal Reserve will cut interest rates.

The MSCI index tracking regional stocks .MILA00000PUS jumped 1.3% to a 3-1/2-year high, keeping it on pace for a strong monthly finish, up about 6.1% month‑to‑date.

The currencies index .MILA00000CUS added 0.22%, taking its monthly advance to about 2%. Both indexes were on track for weekly gains.

Emerging markets have rebounded from last week's sharp selloff triggered by concerns over highly priced technology shares and shifting expectations of the Fed's monetary policy path.

"It's been a good year for Latam FX on the back of carry demand for the region's high yielders and the boom in metals," said ING analysts in a note.

"Political risk from elections in Brazil and Chile will be present, and US-Mexico trading relations are far from settled. Still, we see the region's currencies staying supported."

U.S. markets closed higher in a shortened session after Thanksgiving.

An outage at the world's biggest exchange operator, CME, affected futures spanning foreign exchange, commodities, Treasuries and stocks, before resuming most operations.

ECONOMIC INDICATORS, REGIONAL UPDATES IN FOCUS

In Brazil, the benchmark index Bovespa .BVSP hit an intraday high and was set for its best month since November 2023, while the real BRL= strengthened 0.43% to near a strong monthly finish.

The jobless rate hit an all-time low in the three months through October, coming in below market expectations despite high interest rates, according to data from statistics agency IBGE.

Brazil's policy rate stands at 15%, its highest level since the mid-2000s; however, expectations of an interest rate easing cycle gained momentum after Wednesday's inflation data showed the print within the Central Bank's range.

Shares of miner Vale VALE3.SA added 1.9% after the company announced a payment of about 3.58 reais ($0.67) per share in dividends and interest on equity to shareholders.

Chile's main stock index .SPIPSA outperformed its peers in November, rising 7.4% month‑to‑date, as the first round of Chile's election this month was seen as a harbinger of victory for far‑right candidate Jose Antonio Kast in the December 14 runoff. Investors were betting on market‑friendly initiatives under a conservative government.

The local currency peso CLP= was up 1.5% month-to-date - its fifth monthly rise in a row. It was up 0.1% on Friday.

Data showed copper output in Chile, the world's largest producer of the metal, fell 7% year-on-year in October to 458,405 metric tons. The country's unemployment rate hit 8.4% in the quarter through October, in line with expectations.

Colombian equities .COLCAP gained 0.62% while the peso COP= was 0.15% lower. The country's independent fiscal rule committee lowered its 2025 fiscal deficit projection to 6.2% of GDP, below the target of 7.1%.

Fresh data showed the urban jobless rate fell to 8% in October from 9.5% a year earlier, while the national unemployment rate was 8.2%, down from 9.1% a year earlier.

A Reuters poll showed Colombian inflation is set to moderate in November, although forecasts have risen again for the period through 2027, keeping the indicator above the central bank's target.

Mexico's seasonally adjusted unemployment rate was 2.6% in October, the national statistics agency said on Friday. Equities .MXX jumped 1.8%, while the peso MXN= firmed 0.3% against the dollar.

Argentina's MerVal index .MERV rose 0.51%, while the peso ARS= was largely steady.

Key Latin American stock indexes and currencies: