Forex - Latam Summary & Highlights 20th June

 20:54 (GMT) 20 Jun

  [Forex Highlights]

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Latam Summary & Highlights 20th June (0100-QCHL-C01)

BRAZIL: BRL dropped 1.43% to close at 3.33 as the market got spooked by the Senate Social Affairs committed decision to reject the labour reform bill. Although the bill is still in its way to the Senate floor where it is likely to be approved, the decision suggests the govt. will have difficulties with the pension reform. BCB continued to roll over the US$6.4bn maturing on 1st July. Di rates widened on the same political concerns and Di 18 was up by 5bp to 9.07%, while Jan 21 increased by 12bp to 10.11%. Market is pricing in a -84bp rate cut in July. Ibovespa lost 2% to close at 60,771 on political concerns. 5Y CDS widened by 3bp to 241. May tax revenue dropped 0.96%y/y in real term to BRL97.7bn. Caged formal job registrations was better than expected at 34.25K.

MEXICO: MXN sold off significantly, reflecting weakness in the emerging market as oil prices dived. MXN closed 1.3% weaker at 18.192 after testing 18.235 10y spread with UST widened by 8bp to 478 to reflect increased risk. 1y IRS was up 4bp to 7.41% as the market gets ready for Banxico monetary policy decision on Thursday. 5y CDS widened by 2bp to 113. Mexbolsa was weaker by 0.27% to close at 49,037. Q1 aggregate demand came at 2.0%q/q, 4.0%y/y, stronger than market expected with private consumption (0.7%q/q, 3.1%y/y). Front end of the curve widened in the weekly auction as the market prepares ahead of Banxico decision. 28d cetes was up 8bp to 6.87%

ARGENTINA: Market was closed for holiday. 5y CDS was up 8bp to 322.

CHILE: CLP dropped 0.37% in the day to reflect general emerging market weakness on the back of commodity markets sell off. 1y IRS was up 1bp to 2.51% on CLP weakness. 5Y CDS was unchanged at 69. IPSA closed down by 0.6% at 4,795.

COLOMBIA: COP returned after long weekend to find a less supportive market with large drop in oil prices and reportedly large outflows linked to foreigners taking profits in the TES market. COP lost 1.9% to close at 3033.03. 1y IRS widened 3bp to 5.12%. 5y CDS widened by 5bp to 135. IGBC lost 1.05% to close at 10,789. April trade balance was weaker than expected at -US$1.233bn.

PERU: PEN lost 0.2% in the day to close at 3.2727, falling along with emerging currencies and commodity prices. No BCRP intervention. 1y NDF implied rate was up 17bp to 4.80%. 5y CDS was up 1bp to 87.

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