EMERGING MARKETS-Mexican stocks log best day in 2-months on USMCA cheer, Brazil shares pause

By Susan Mathew

(Updates prices) By Susan Mathew Dec 10 (Reuters) - Brazilian stocks dipped on Tuesday after marking new highs over the past four sessions, while Mexican shares posted their biggest one-day gain in two months as Canada, Mexico and United States agreed to a fresh overhaul of their trade agreement. A revision of new North American Free Trade Agreement, called USMCA which was initially struck last year, adds more stringent oversight of the pact's labor provisions. The deal still needs the approval of lawmakers in all three countries. Mexico's IPC index rose 1.4%, while the peso traded flat against a weaker dollar, after five straight sessions of gains. Broader sentiment was cautious ahead of this weekend's deadline for a new round of U.S. tariffs on Chinese goods. Global markets cut some losses after The Wall Street Journal reported U.S. and Chinese trade negotiators were discussing a delay beyond Dec. 15. Anticipation of the tariffs has kept global equities in tight ranges this week, as investors fear an interim trade deal between Washington and Beijing will not be met before the deadline. "It's fair to say that everyone expects some sort of a phase one (interim) deal ... With so much positive news already priced in, there is much bigger risk of downside if those expectations are disappointed," said Simona Gambarini, markets economist at Capital Economics. Brazilian stocks fell 0.5% after gaining 1.5% over the last four sessions, with financials leading the declines. The real currency barely moved and was last at 4.144 to the dollar. Brazil's central bank will lower its key interest rate to a new low on Wednesday, according to the unanimous view of economists in a Reuters poll, although recent strength in the economy suggests it may be the end of the cutting cycle. Chilean stocks inched up, while the peso weakened 0.9% to post its steepest percentage loss in two weeks. Chile's economy is expected to shrink by 2.5% in the last quarter of 2019, according to a monthly poll of analysts, the latest of several dire predictions following weeks of protests. Argentine stocks fell 3.6%, while the peso was flat as the new Peronist leader Alberto Fernandez assumed the presidency on Tuesday. Fernandez said he planned to implement a "massive" credit system to offer lower rates. Inflation in Argentina runs at an annual rate of above 50% with sky-high interest rates. Latin American stock indexes and currencies at Stock indexes Latest Daily % change MSCI Emerging Markets 1050.05 -0.1 MSCI LatAm 2744.44 -0.09 Brazil Bovespa 110473.33 -0.45 Mexico IPC 42553.84 1.44 Chile IPSA 4759.73 0.24 Argentina MerVal 35076.53 -3.66 Colombia COLCAP 1602.63 -0.17 Currencies Latest Daily % change Brazil real 4.1448 -0.39 Mexico peso 19.2425 -0.07 Chile peso 778.5 -0.42 Colombia peso 3403.5 0.28 Peru sol 3.399 -0.74 Argentina peso 59.8100 0.23 (interbank) (Reporting by Susan Mathew and Ambar Warrick in Bengaluru; Editing by Nick Macfie)