EMERGING MARKETS-Latam stocks join EM rally; Brazil's real firms after c.bank comments

By Susan Mathew June 27 (Reuters) - Latin American stocks rallied on Monday, tracking broader emerging market peers higher on easing bets of big U.S. interest rate hikes, while Brazil's real moved away from multi-month lows after the central bank said the inflation surge could start to slow. Brazil's real rose 0.4% after hovering at its lowest since February. Brazil's central bank chief Roberto Campos Neto said on Monday that much of the bank's work on interest rates was done and was now expected to slow down the inflationary process. Brazil's benchmark Selic rate was hiked by 50 basis points to 13.25% this month, and more were signaled. "Campos' speech ... is in line with our call of a 50bps hike of Selic rate in August," wrote strategists at Citigroup. "But risks of additional hikes keep rising," they said, given the higher than midpoint target inflation forecast for 2023. They expect the central bank to start cutting rates only in the second half of 2023. Meanwhile, oil production in Ecuador could be suspended completely within 48 hours over "acts of vandalism, taking over wells and closing roads", the Energy Ministry said on Sunday. The former OPEC country, which was pumping around 520,000 barrels per day has been embroiled in mass anti-government protests since June 13, with calls for lower prices for fuel, food and other basics. Ecuadorean President Guillermo Lasso said on Sunday he would cut prices for gasoline and diesel by 10 cents a gallon. "Ecuador bond performance has been mirroring the drop in oil prices and protests. Bonds were expensive and the technical position is not supportive. We think prices are close to fair value and we do not expect a large rebound from these levels ... we prefer to remain neutral" Citi strategists said. Among stocks, even as Wall Street slipped on profit taking, Latam bourses rose between 0.1% and 2.0% as easing of COVID-19 restrictions in China lifted the mood. Brazil's Bovespa index was on course for its best session in more than three months. MSCI's index of EM shares was up 1.5%. Sentiment globally got a lift as signs of slowing economic growth and a recent retreat in commodity prices saw traders scale back bets on how high the Federal Reserve will raise interest rates. In Argentina, the highly controlled peso fell 0.4%. The central bank on Monday introduced some new measures to build foreign exchange reserves. Markets in Chile and Colombia were closed for local holidays. Key Latin American stock indexes and currencies at 1436 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1026.53 1.52 MSCI LatAm 2081.77 1.51 Brazil Bovespa 100668.45 2.02 Mexico IPC 47818.90 0.16 Argentina MerVal 82989.30 0.464 Currencies Latest Daily % change Brazil real 5.2307 0.37 Mexico peso 19.8993 -0.25 Peru sol 3.7767 -0.21 Argentina peso 124.7000 -0.35 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alison Williams)