BRAZIL: BRL consolidated gains below 3.10 as stronger than expected US data failed to support global DXY gains. BRL gained 0.9% to close at 3.058, with BCB selling 6K in FX swaps to rollover partially the 1st March FX swap maturity. moved below 3.10 despite DXY gains as market understood that BCB is not ready to reduce its FX liabilities at a fast pace, offering to rollover at least half of the 1s March FX maturity. BRL closed 0.60% stronger at 3.0921. The DI curve was mixed despite stronger BRL. Jan 18 was down 3bp to 10.63% and Jan 21 was unchanged at 10.25%. 5Y CDS was wider by 4bp to 222. Ibovespa rallied 1.89% to close at 67,976. Feb IGP-10, at 0.14%m/m, 5.67%y/y was below market expectations (0.24%m/m). Dec services volume was below expectations at 0.6%m/m, -5.7%y/y.
MEXICO: MXN was all over the place, testing above 20.45 in the aftermath of stronger than expected US prices and retail sales numbers, but later as DXY gains failed to hold, MXN strengthened to close the day unchanged at 20.255. 10y spread with US bonds was up 2bp to 490 and 1y local swap was down 2bp to 7.23%. 5y CDS was wider by 5bps to 150. Mexbolsa lost 0.48% to close at 47,161.
ARGENTINA: ARS continued to recover, gaining 0.68% to 15.37 with support from global backdrop. Bonar 24 was up 0.3% to 118.43 while 5y CDS was up 10bp to 364. Merval was up 0.26% to 19,657.
CHILE: CLP continued to recover with the help of global backdrop where US equity continued its upward trend and DXY was flat, and gained 0.4% to close at 639.08, despite flat copper prices. 1y IRS was up 2bp to 3.00% closing bets on BCCH cutting below 3.00%. 5Y CDS was down 1bp to 75. IPSA recovered 0.27% to 4,355.
COLOMBIA: COP was marginally stronger at 2871.73 despite rather supportive global backdrop. 1Y IRS was down 3bp to 6.45% with market already having reduced bets for rate cuts below 6%. Banrep's Echavarria suggested that while the monetary authority will cut rates, it will do it slowly. IGBC jumped 0.87% to 9,968. 5y CDS was up 4bp to 142.
PERU: PEN was stronger by 0.4% at 3.245, following regional patterns. BCRP intervened buying US$95mn to control PEN gains. 1y NDF implied rate was down 11bp to 5.36%. 5y CDS was up 4bp to 103. Dec GDP surprised on the upside with a large jump in manufacturing production. The print was at 3.25%y/y. The reading brings 2016 to 3.9%. Unemployment was above expectations at 7.2%, but wages were resilient at 4.8%y/y