EMERGING MARKETS-Latam currencies head for worst monthly performance since Sept 2022
* Colombia cuts interest rates as expected * Mexico economy grows 0.2% in Q1 from previous quarter * Brazil's job creation outpaces expectations in March * Argentina lower house approves Milei reform bill * Latam FX down 1.1%, stocks shed 2.1% (Updated at 1905 GMT) By Bansari Mayur Kamdar and Johann M Cherian April 30 (Reuters) - Latin American stocks and currencies fell on Tuesday, headed for monthly losses, as U.S. interest rate uncertainties and geopolitical tensions weighed, while Colombia's peso extended declines after a local central bank policy decision. The MSCI index for Latin American currencies fell 1.1% and was on track for its biggest monthly drop in 19 months. Regional stocks shed 2.1% by 1905 GMT, on course for its worst month since January. Investors have dialed back expectations for the timing and magnitude of U.S. rate cuts this year after hotter-than-expected inflation reports. "A spike in global volatility and a hawkish Fed have weighed on LatAm FX, particularly in crowded high-carry currencies," BofA Global Research analysts wrote. "With all central banks already cutting rates in the region, the appeal of carry as an investment thesis declines under high global volatility." The dollar index strengthened 0.5%, with all eyes on the Fed's rate decision on Wednesday, when it is expected to keep borrowing costs unchanged. The Mexican peso slipped 0.6% against a firm dollar after data showed the oil producing country's economy posted better-than-expected first-quarter growth versus the previous three months. Brazil's real fell 1.3% after data showed creation of formal jobs in March significantly outpaced expectations, while Chile's peso lost 1.9% following news that unemployment in the copper producing nation rose to 8.7% in the quarter through March as expected. Manufacturing production in Chile fell 2.1% in March on a yearly basis, the country's INE statistics agency said, well below the 4.7% growth expected, while the Andean nation's copper output was flat. Colombia's peso slid 1.8% after the domestic central bank trimmed the benchmark interest rate by 50 basis points to 11.75%, as expected, as policymakers looked to boost the economy while containing inflation. Bucking regional weakness, Argentina's MerVal index jumped 2.1% to a record high after the country's lower house of Congress approved President Javier Milei's sweeping reform bill ahead of a final Senate vote and backing articles related to privatizing state bodies and labour reform. More broadly, emerging market stocks were set to end their third month higher supported by recovery in China stocks, while emerging market currencies were set for a monthly decline. Local currency emerging market bonds have lost investors 2.2% this month. Key Latin American stock indexes and currencies at 1910 GMT: Latest Daily % change MSCI Emerging Markets 1045.23 -0.58 MSCI LatAm 2433.99 -2.2 Brazil Bovespa 126020.54 -1.05 Mexico IPC 56963.24 -1.5 Chile IPSA 6537.21 -0.2 Argentina MerVal 1337895.13 2.28 Colombia COLCAP 1369.85 -0.81 Currencies Latest Daily % change Brazil real 5.1864 -1.39 Mexico peso 17.1067 -0.61 Chile peso 959 -1.82 Colombia peso 3927.5 -1.81 Peru sol 3.765 -1.24 Argentina peso 876.5000 0.06 (interbank) Argentina peso 1020 2.45 (parallel) (Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Ed Osmond and Richard Chang)