EMERGING MARKETS – Brazil’s real Mexican peso leads Latam FX up on strong commodity gains

* Metals rise after China pays Evergrande bonds * Mexican central bank sees rate hike 25 basis points to 5% * Peru’s central bank is expected to raise rates by 50 basis points * Chile’s economy will grow by more than 11% this year – Piñera 11. November (Reuters) – Brazil’s real led to gains among Latin American currencies on Thursday as commodity and metal prices rose amid cheers from China Evergrande, while Mexico’s peso rose ahead of a central bank rate decision later in the day. The Mexican peso rose 0.7%, with the Mexican central bank, known locally as Banxico, set to hike rates for the fourth straight year at its monetary policy meeting. Estimates suggest a 25 basis point increase to 5% with a decision due at 2 p.m. ET (1900 GMT). Data earlier this week showed that Mexican inflation skyrocketed in October, reaching a rate more than double the central bank’s target, cementing the need for further rate hikes. “If the bank were to raise the key interest rate by 50 basis points instead of 25 basis points, the financial markets would probably see this as a significant acceleration in the rate of tightening,” the Credit Suisse analysts write in a press release. “That way, the bank would run the risk of ending up with an unnecessarily high final interest rate, considering that this year’s inflation shock is unlikely to last until 2022.” The Peruvian central bank will also rise 50 basis points to 2% later on Thursday. The sol was ahead of the meeting. Brazil’s real rose 1.3%, helped by a surge in iron ore and copper prices after Chinese real estate developer Evergrande made its bond payments, raising hopes of government support for a property sector that can fuel significant demand for metals. Bradesco analysts also pointed to some reduction in uncertainty after the Brazilian House of Commons  -proved a constitutional amendment that allows for more spending. But now we are waiting for the Senate to pass. Sao Paulo publicly traded stocks rose 2%, with the index hitting its best session in over two weeks. Brazilian airline Azul SA grew 4.3% despite a higher net loss in the third quarter thanks to higher loan and leasing expenses. Emerging market currencies had taken a hit last session after a surge in US inflation increased rate hike bets there, propelling the dollar to 16-month highs and rising bond yields. South Africa’s rand rebounded 1% and  -proached the seven-week high, trying to catch up from Wednesday’s 2.7% decline following US inflation data. In its medium-term budget policy statement https://www.reuters.com/article/safrica-economy-budget/south-africa-cuts-deficit-forecast-sees-debt-peaking-at-lower-level-idUSJ8N2KV013, South Africa lowered its deficit forecast and now sees debt peaking at lower levels. Rising copper prices helped the peso of top producer Chile to gain 0.5%. Chile’s economy is expected to grow more than 11% this year amid a r -id recovery from the effects of the coronavirus pandemic, President Sebastián Piñera said Thursday. The forecast, which was higher than the government’s previous estimate, also helped prop up the currency. The currency of the oil-exporting nation of Colombia lagged as oil prices fell to $ 82 a barrel, fueling a sharp decline sparked by worries over rising US inflation as OPEC lowered its forecast for oil demand in 2021 . Most important Latin American stock indices and currencies at 1433 GMT: Stock indices Last daily change in% MSCI Emerging Markets 1280.18 0.45 MSCI LatAm 2217.70 1.75 Brazil Bovespa 108073.87 1.99 Mexico IPC – – Chile IPSA 4468.39 – 0.46 Argentina MerVal 96 081.83 1 Colombia COLC – 1378.58 0.95 Currencies Current Day% Change Brazil Real 5.4268 1.38 Mexico Peso 20.4921 0.63 Chile Peso 790 0.58 Colombia Peso 3876.53 – 0.04 Peru sol 4.0193 -0.11 Argentina Peso 100.1600 -0.01 (Interbank) (reporting by Shashank Nayar and Susan Mathew in Bengaluru; editing by Andrea Ricci)