Forex - Latam Summary & Highlights January 10.


 23:14 (GMT) 10 Jan

  [Forex Highlights]

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Latam Summary & Highlights January 10. (0101-HDHG-C01)

BRAZIL: BRL had a large correction, linked to a large outflow amidst relatively low volume, and despite a supportive global backdrop. BRL lost 0.8% in the day to close at 3.7113. Local market remained moderately supportive with many in the market believing Fin Min Guedes will be able to convince both President Bolsonaro and Congress of the need to pass a pension reform. BCB sold USD 670m in FX swaps to rollover Feb maturity. Di was wider with Jan 20 Di up 5bp to 6.64% and Jan 21 Di was up 9bp to 7.45%. 5y CDS widened by 1bp to 183. Ibovespa gained 0.21% to 93,806. 1st preview of January IGP-M was above forecasts at 0.03%.

MEXICO: MXN closed the day stronger by 0.4%, benefitting from global market perception that the US Fed board is becoming more dovish by the day. Spread between 10y Mbono and 10y UST dropped by 7bp to 591. 1y IRS was down 5bp to 8.63%. 5y CDS increased by 2bp to 136. Mexbolsa was practically unchanged at 43,668. Vehicle Production and sales continue to fall with a -9.7%y/y and -10.6%y/y print for December. Consumer Confidence SA had a larger than expected increase from 41.1 to 43.8

ARGENTINA: As ARS breached the lower bound of the no intervention zone at 37.35, the Central Bank bought USD 20m at an average price of 37.305. However, this intervention was not enough to take the currency back to the target band, and ARS closed the day outperforming regional peers with a 0.73% gain to 37.093. The monetary policy rate was 33bp down to 58.45%. Bonar 24 increased 0.85% to 96.85. 5y CDS fell 14bp to 688. Merval gained 1.27% to 34,200.

CHILE: CLP gained a mild 0.18% to 675.73 catching up for increased dovishness in Fed minutes, which came out yesterday after the CLP market closed, though lower copper prices limited the rise. 1y IRS was 3bp up. 5y CDS was stable at 54. IPSA gained 0.53% to 5,293.

COLOMBIA: COP had a minor correction and lost 0.05% to 3,136.34, following oil prices loss. 1y IRS was unchanged at 4.37%. 5y CDS increased by 1bp to 133. IGBC was up 0.34% to 11,628.

PERU: PEN joined emerging market correction and lost 0.09% to close at 3.3420. 1y NDF implied rate was 14bp down to 4.22%. 5y CDS was down 2bp to 85. As expected the BCRP left the monetary reference rate at 2.75%. November trade balance was reported at US$527mn


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