A Latin American equities benchmark rose on Tuesday, bolstered by a rebound in Brazilian shares, while Latin American currencies broadly advanced against a soft dollar. Global currency traders wound back safe-haven dollar holdings on hopes that the fresh round of U.S.-China talks would aid strained trade ties between the world’s two biggest economies, setting the stage for Latin American currencies to gain. Brazilian equities climbed back above the 97,000 mark. They more than made up ground they lost on Monday amid the firing of a key aide of President Jair Bolsonaro, Gustavo Bebianno, on corruption allegations. Bolsonaro’s pension reform proposal is due to be addressed in the country’s Congress on Wednesday. Most investors believe reform to the pension system is key to putting Brazil, Latin America’s top economy, on firmer footing. “The scandal isn’t likely to damage public opinion of Bolsonaro as he is seen as acting against electoral fraud,” Citigroup strategists Dirk Willer and Kenneth Lam wrote in a note. “The scandal shouldn’t materially hurt the chances of pension reform, though it is a sign of political noise which is to come during the negotiation phase,” Willer and Lam said, noting that Brazil’s real was the developing world’s worst-performing currency on Monday after the news broke. MSCI’s Latin American stocks index rose 1.5 percent, as gains in Brazil overcame losses in markets such as Mexico, while its index of Latin American currencies gained 0.7 percent. Sao Paulo-traded stocks rose 1.2 percent, with gains seen across the board. The real firmed 0.3 percent, following Monday’s 0.9 percent loss, while yields on local, 10-year bonds dipped for a fifth session in six. Mexico’s peso, among the developing world’s most traded currencies, firmed half a percent. The country’s stocks benchmark dipped 0.1 percent as declines among some consumer staples stocks outweighed a 4.8 percent rise in Grupo Mexico after Citi upgraded the miner to “buy” from “neutral.”

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