Latam stocks, FX track global markets higher, head for weekly gains

Indexes of currencies and stocks in Latin America jumped on Friday, on track for weekly gains, as Wall Street rallied and U.S. Treasury yields retreated from multi-month highs.

The MSCI index for Latin American currencies (.MILA00000CUS) gained 0.8%, set to end a turbulent week 1.5% higher, in a rebound from steep losses triggered by uncertainties from heightened Middle East tensions.

Regional stocks (.MILA00000PUS) rose 2%, with the index on course for its best week since December with a gain of nearly 3%.

Brazil's Bovespa index IBOV rose 1.6% on boost from financial stocks.

Brazil's real USDBRL rose 0.9% against the dollar after data showed prices in Latin America's largest economy rose slightly less than expected in mid-April.

"This inflation release probably just keeps the door open to a 50 bp move (from the central bank), rather than a smaller 25 bp cut," said William Jackson, chief emerging markets economist at Capital Economics.

"With fiscal concerns building and the real under pressure, the pace of monetary easing is set to slow very soon."

Emerging markets have struggled this month as the dollar and bond yields rose with investors pushing back bets for Federal Reserve interest rates cuts.

But benchmark Treasury yields retreated off five-month highs on Friday, on news that U.S. inflation gains in March were largely in line with economists' expectations.

An index of global emerging market stocks EEFS leapt over 3% in its best week since July.

However, investors increased bets on a first Fed rate cut occurring as late as September, highlighting the challenges ahead for emerging market policymakers. (FEDWATCH)

Brazil's central bank chief Roberto Campos Neto emphasized that U.S. interest rates are a major focal point, with markets eyeing inflation of the world's largest economy.

Mexico's peso USDMXN, Peru's sol USDPEN and the Colombian peso USDCOP advanced between 0.3% and 1.7%, respectively.

S&P Global Ratings on Thursday downgraded Peru's rating to BBB- from BBB, citing political difficulties facing the South American country, but kept the outlook at "stable."

Mexican state energy company Pemex , one of the world's most indebted energy firms, said its debt fell to $101.5 billion at the end of the first quarter with strong government support.

Argentina's central bank lowered the benchmark interest rate to 60% annually from 70%, the monetary policy entity said on Thursday.

Shares of Mexican broadcaster Televisa TLEVISA/A jumped over 5% after the company said it plans to merge its satellite TV unit Sky with its cable TV and internet service Izzi as soon as possible.

Key Latin American stock indexes and currencies at 1945 GMT: