Forex - Latam Summary & Highlights October 15.


 20:29 (GMT) 15 Oct

  [Forex Highlights]

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Latam Summary & Highlights October 15. (0101-PPHB-C01)

BRAZIL: Global backdrop turned more negative, with IMF's decade-low global growth estimates and reports noting continued declines in U.S. inflation expectations taking EM currencies to the negative territory alongside with commodities. Reports confirming that the U.S. and China remain far from reaching even a "phase one" trade agreement exacerbated the negative sentiment. Latest reports say China will struggle to buy the $40-$50 billion agricultural products that Trump promised unless current tariffs are reduced. The currency closed the day losing 1.09% to 4.173. Underperformance came from the domestic side, with reports that the head of President Jair Bolsonaro's party is part of a probe over campaign financing, which market fears could hinder progress on other reforms. Di curve rose across the board. Jan 20 Di was up 1bp to 4.92% and Jan 25 Di was up 9bp to 6.33%. 5y CDS was down 2bp to 132. IBovespa recovered 0.20% to 104,511.

MEXICO: Five-day winning streak for MXN with U.S. market back again catching up with MXN's positive momentum after Monday's Columbus Day holiday. The currency gained 0.14% to 19.245. Spread between 10y Mbono and 10y UST was down unchanged at 503. 1y IRS was up 2bp to 7.11%. 5y CDS dropped 1bp to 109. Mexbolsa lost 0.15% to 43,235. International reserves to October 11 marked USD 180, 324.

ARGENTINA: ARS came back from yesterday's local and U.S. holiday losing 0.40% to 58.27. The currency outperformed most regional peers supported by FX intervention by the BCRA. The monetary policy rate remain at the 68% floor that the BCRA established for October. Bonar 24 decreased 1.36% to 40.5. 5y CDS was unchanged at 3510. Merval lost 1.46% to 31,334. Economy Minister Hernan Lacunza announced Argentina's Jan-Sep primary fiscal deficit was 0.1% of GDP.

CHILE: CLP extended the selloff losing 0.54% to 716.30 amid lower copper prices and increased pessimism that the U.S. and China could reach agreement anytime soon. 1y IRS was up 1bp to 1.59%. 5y CDS dropped 1bp to 34. IPSA gained 0.11% to 5,137.

COLOMBIA: COP lost 0.55% on lower oil prices and broadly negative EM sentiment. 1y IRS was up 2bp to 4.34%. 5y CDS dropped 1bp to 88. IGBC lost 0.69% to 12,859. August manufacturing production came well below expectations at 0.1% y/y, while August retail sales surprised on the upside at 9.5% y/y.

PERU: PEN traded sideways at 3.3673. 1y NDF was 8bp up to 3.29%. 5y CDS dropped 1bp to 34. August economic activity came slightly weaker than consensus at 3.4% y/y. September unemployment rate was a little below expectations at 5.8%.


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