Forex - Latam Summary & Highlights October 14.


 20:52 (GMT) 14 Oct

  [Forex Highlights]

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Latam Summary & Highlights October 14. (0101-PPDB-C01)

BRAZIL: BRL underperformed peers to reflect August disappointing economic activity. The currency also reacted to the results of BCB's weekly survey of economists, which showed reduced market's forecasts for 2019 and 2020 inflation, as well as 2020 policy rate, which was lowered to 4.75% from 5.0% in the previous survey. Di curve dropped across the board with lower than expected August proxy GDP. Jan 20 Di was down 1bp to 4.91% and Jan 25 Di was down 2bp to 6.23%. 5y CDS was down 1bp to 133. IBovespa recovered 0.45% to 104,295. August economic activity surprised on the downside at 0.07% m/m, -0.73% y/y.

MEXICO: MXN extended the rally gaining 0.26% to 19.271. Tempered optimism on the U.S./China trade front with reports suggesting that china will put conditions to sign the yet-to-be-written trade deal was not enough to counter the positive MXN momentum, reaching a four-day winning streak. Reports that President Andres Manuel Lopez Obrador is stepping up efforts to persuade democrats to sign USMCA deal by assuring them this government sill improve labor conditions in Mexico may have provided some support, too. Spread between 10y Mbono and 10y UST was down 1bp to 503. 1y IRS was unchanged at 7.09%. 5y CDS dropped 1bp to 110. Mexbolsa gained 0.18% to 43,292. Moody's credit rating cut Mexico's 2019 GDP forecast to 0.2% from 0.5%, while trimming 2020 forecast to 1.3% from 1.5%, citing weak private consumption and investment.

ARGENTINA: Local markets were closed for holiday. 5y CDS was up 5bp to 3,510.

CHILE: CLP lost 0.31% in the day to 712.40 amid a broadly stronger U.S. dollar. 1y IRS was stable at 1.58%. 5y CDS was also unchanged at 35. IPSA lost 0.10% to 5,131.5.

COLOMBIA: COP lost 0.06% to close the day at 3432.57 reflecting 2% oil prices drop. 1y IRS rose 4bp to 4.32%. 5y CDS was 1bp down to 90. IGBC was closed for holiday.

PERU: PEN followed the region losing 0.35% to 3.3674. 1y NDF dropped 5bp to 3.21%. 5y CDS was stable at 58.


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