Market News

  *  Peru may tap capital markets this year to better manage debt   

        * Brazil's Lula cancels trip to China     

        * Latam stocks up 1.0%, FX adds 0.5%   

  
    By Bansari Mayur Kamdar
       March 27 (Reuters) - Colombia's peso rallied over 1% as
the U.S. dollar struggled for direction on Monday, leading
currencies in Latin America higher for their sixth straight
session as fears of a global banking crisis ebbed.
    Latin American markets tracked the recovery in their U.S.
peers after First Citizens BancShares said that it
would take the deposits and loans of failed Silicon Valley Bank
, helping calm fears of banking contagion.
    The MSCI's index for Latam currencies gained
0.5% by 1447 GMT, while stocks added 1.0%. 
    "What you're seeing today is not necessarily a return to
risk appetite or anything major like that, but the nature of
last week's chaos did give a bad taste and reminder of what 2008
was like," said Juan Perez, director of trading at Monex.
    The peso rose 1.1% against a subdued dollar, with
firm crude prices also supporting the currency of the oil
producer.
    Investors focused on a decision by Colombia's central bank
decision later this week where it is expected to raise interest
rates by 25 basis points to 13%. 
    "The MPC may complement this (25 bps) move with guidance
suggesting that with such a hike the policy stance becomes
significantly restrictive to lay the groundwork for eventually
stopping the tightening cycle, although we do not anticipate
that the MPC will explicitly close the door to further hikes,"
said analysts at Goldman Sachs in a note.
    Stocks in Colombia were flat, with majority
state-owned energy company Ecopetrol slipping 0.8% on
naming Alberto Consuegra as its interim CEO on Friday. 
    Fellow oil producer Mexico's currency added 0.2%
against the dollar, while the Chilean peso and the
Peruvian sol gained 0.3% and 0.6%, respectively.
    Peru's government expressed qualified interest in tapping
the international bond market later this year in a bid to better
manage liabilities, said Economy Minister Alex Contreras.
    In Brazil, the real added 0.3% against the
greenback, while stocks gained 0.8%.
    Brazil's President Luiz Inacio Lula da Silva canceled a trip
to China due to medical reasons, and the March 27-31 visit will
be rescheduled.
    Focus now turned to an eagerly awaited fiscal framework in
Brazil, which was initially promised by Finance Minister
Fernando Haddad for March, but was postponed by Lula until after
the planned China trip.
     On the data front, Brazil posted a lower-than-expected
current account deficit in February, showed central bank data,
mainly due to a decrease in factor payments.
    Elsewhere in emerging markets, Israel's currency and stocks
rallied on rising expectations that Prime Minister Benjamin
Netanyahu will halt his bitterly contested plans to overhaul the
judiciary as protests in Tel Aviv and Jerusalem intensified.