Forex - Latam Summary & Highlights December 2.


 21:29 (GMT) 02 Dec

  [Forex Highlights]

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Latam Summary & Highlights December 2. (0101-QCMQ-C01)

BRAZIL: BRL rallied 0.5% to 4.215, with the market ignoring the threat of tariffs on steel and aluminum and concentrating better on improved outlook and BCB steady intervention. Di rates were up to reflect higher risk and stronger than expected inflation numbers. Jan 21 DI was up 5bp to 4.75% and Jan 25 Di was also up 5bp to 6.56%. 5y CDS was up by 1bp to 125. IBovespa recovered 0.7$ to close at 108,946. IPC-S to November 30 was above forecasts at 0.49%m/m. November PMI recovered to 52.9. November trade balance was above forecast at US$3.43bn. No significant change in the weekly survey of economists with the upward adjustment of 2019 inflation to 3.52% as the main change.

MEXICO: MXN was the clear regional underperformer, ignoring the drop in DXY and concentrated on the fall in US equities, closing 0.2% weaker at 19.572. Spread between 10y Mbono and 10y UST was unchanged at 532. 1y IRS was up by 3bp to 7.12%. 5y CDS was unchanged at 92. Mexbolsa was weaker, mimicking the US equity market, losing 0.7% to 42,540. Inegi PMI dropped to 50.5 but Market PMI dropped much more, down to 48.0. October remittances were weaker than expected at US$3.13bn, rising 3.6%y/y. Survey of economists cut 2019 GDP to 0.0% and 2020 to 1.07%.

ARGENTINA: ARS lost 0.10% to 59.965 due to the announcement by U.S. President Donald Trump that he will restore the tariffs on all steel and aluminum imports coming from Argentina and Brazil. The BCRA reportedly had to sell approximately USD50m to contain the ARS depreciation. The monetary policy rate remained at the 63% December floor imposed by the BCRA. Bonar 24 decreased 4.68% to 31.6. 5y CDS rose 477bp to 5,120. Merval lost 3.05% to 33,447.

CHILE: CLP outperformed EM peers gaining 0.76% to 803.36 supported by a $200m FX spot intervention. 1y IRS rose 18bp to 1.83%, still catching up with Thursday's announcement of a potential $20b FX intervention program. 5y CDS was unchanged at 56. IPSA lost 0.82% to 4,502. October IMACEC slumped much more than expected at -5.4% m/m, -3.4% y/y impacted by the social crisis.

COLOMBIA: COP recovered 0.2% to close at 3,508.77. Reduction in global risk aversion helped the currency, but local concerns on social unrest remained, limiting the upside. 1 Y IRS was up by 2bp to 4.39%. 5Y CDS was unchanged at 90. Q3 Current Account was weaker than expected at -US$3.92bn.

PERU: PEN recovered 0.4% to close at 3.3915, with positive data in China and general positive trends in global markets. 1y NDF was down by 22bp to 2.98%. 5y CDS was unchanged at 56.


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