By Bruno Federowski
SAO PAULO, June 6 (Reuters) - Yields on Brazilian interest rate futures contracts fell on Tuesday after the minutes from the central bank's latest policy meeting reaffirmed its intention of slowing down the pace of rate cuts next month.
According to the meeting minutes released on Tuesday, the bank's growing uncertainty over President Michel Temer's reform agenda prompted policymakers to signal a slower pace of policy easing. The bank's nine-member monetary policy committee, known as Copom, last week decided to lower its benchmark Selic rate by 100 basis points to 10.25 percent.
Yields on interest rate futures reflect traders expectations for a smaller 75-basis-point cut in the bank's July meeting, with a smaller chance of a 50-basis-point reduction .
The prospect of a slower pace of cuts helped foster demand for the Brazilian real , but the currency's gains were limited by concerns over the implementation of structural reforms - seen as critical to curbing debt growth - amid a widening political scandal.
An electoral court is set to begin later on Tuesday a trial over alleged illegal funding of former President Dilma Rousseff's 2014 campaign. The ruling could potentially oust Temer, who ran as Rousseff's vice president. Brazil's benchmark Bovespa stock index rose slightly, supported by rising shares of meatpacker JBS SA after its operations in Argentina, Paraguay and Uruguay to rival Minerva SA for $300 million. Mexico's peso extended gains for a second straight day following reports that was close to announcing it had reached a deal with the United States over the trade of sugar between both countries. Concerns over U.S.-Mexico trade have weighed on the currency since the election of President Donald Trump, who has pledged to abandon the NAFTA trade pact.
Key Latin American stock indexes and currencies at 1610 GMT:Stock indexes Latest Daily YTD
pct pct
changechangeMSCI Emerging Markets1,015.28-0.23 18.01 MSCI LatAm 2,547.12 0.238.58Brazil Bovespa 62,599.07 0.243.94Mexico IPC 49,420.52-0.358.28Chile IPSA 4,902.83 0.12 18.10Chile IGPA 24,569.58 0.11 18.50Argentina MerVal 22,203.35-1.07 31.24Colombia IGBC 10,780.98 0.446.45Venezuela IBC 82,593.67 5.71160.50
Currencies LatestDaily YTD
pct pct
changechangeBrazil real 3.2822 0.13 -1.01
Mexico peso 18.2830 0.34 13.46Chile peso 668.75-0.040.29Colombia peso 2,891.83 0.253.79Peru sol 3.266 0.034.53Argentina peso (interbank)15.9950 0.06 -0.75 Argentina peso (parallel) 16.26 0.493.44 (Reporting by Bruno Federowski, editing by G Crosse)
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