* LatAm stocks rally on positive U.S. rhetoric and data
* Emerging market debt spreads tighten on UST sell-off
* U.S. dollar drops broadly versus LatAm currencies
By Daniel Bases
NEW YORK, Aug 21 (Reuters) - Latin American markets surged higher on Friday, pushed by upbeat U.S. housing data and positive comments on the global economy from U.S. Federal Reserve chief Ben Bernanke.
Bernanke, speaking to central bankers and top economists at an annual Fed conference in Jackson Hole, Wyoming, said that economic activity both in the United States and elsewhere appears to be leveling out and the prospects for a return to growth in the near term appear good. For more, please see: [ID:nN2139655]
That followed news that sales of previously owned U.S. homes jumped 7.2 percent in July to mark the fastest pace in nearly two years, according to the National Association of Realtors. [ID:nN21378170]
"This is pretty much a clear case of Latin America responding to a v-shaped recovery in the United States. A lot of these countries are commodity exporters and increased real demand for commodities plus a weaker dollar is good news for the region," said Kathryn Rooney, senior emerging market macroeconomic strategist at BullTick Capital Markets in Miami.
"The U.S. collapsed so much that just getting back to flat, quickly, is a v-shape," Rooney said.
MSCI's Latin America stock index <.MILA00000PUS> rose 1.64 percent on Friday, its fourth straight daily gain. For the week the index climbed 1.63 percent, having dropped sharply on Monday.
MSCI's broader emerging markets stock index <.MSCIEF> rose 1.061 percent on the day, but for the week slipped 0.79 percent.
The Bernanke comments and the U.S. housing data pulled the
rug out from under the U.S. Treasury market, sending the yield
on the benchmark 10-year Treasury
That spurred a massive spread narrowing on the benchmark JP Morgan Emerging Markets Bond Index Plus <11EMJ><.JPMEMBIPLUS>. The spreads narrowed 20 basis points to 362 basis points over U.S. Treasuries, their narrowest point since Aug. 12.
Benchmark sovereign debt rallied across the board while regional currencies also gained ground against the greenback.
In commodity markets, crude oil rose 1.21 percent
Separately, Standard & Poor's cut Nigeria's speculative sovereign long-term foreign currency credit rating one notch to B-plus from BB-minus, citing its costly bank bailout and falling oil revenues. [ID:nLL520570] [ID:nLH461926]
ARGENTINA
Prices rallied for Argentine fixed income assets.
The major commodity producer and No. 3 Latin American economy benefited from better prospects for the global economy but also from an increase in rhetoric from Economy Minister Amado Boudou vowing the restore credibility to the country's economic statistics.
On Friday the government said it will launch a $2.3 billion debt swap next week to ease a financing crunch and to replace controversial inflation-indexed bonds. [ID:nN21342541]
More than a third of Argentine debt is linked to inflation, and economic analysts and opposition politicians accuse the government of low-balling consumer price data to save money on payments.
Argentina has largely been shut out of issuing new debt on international markets because of fallout over its massive 2002 default and subsequent restructuring.
Antonio Cejuela, an analyst at Puente Hermanos brokerage in Buenos Aires, said the swap would help with the government's financing squeeze for the rest of this year and into 2010, when it faces some $13 billion in payments. (Additional reporting by Fiona Ortiz in Buenos Aires, Lucia Mutikani in Washington, Mark Felsenthal and Kristina Cooke in Jackson Hole, Wyoming; Editing by Dan Grebler)