Forex - Latam Summary & Highlights July 18.

 23:06 (GMT) 18 Jul

  [Forex Highlights]

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Latam Summary & Highlights July 18. (0101-MTHC-C01)

BRAZIL: BRL rallied on a combination of global reduction of risk ad markets bet on larger Fed rate cut and expectation of stimulus measures to counter the initial impact the pension reform. BRL closed 1.0% stronger at 3.729. Di curve dropped across the board following BRL gains. Jan 20 Di was down 2bp to 5.70% and Jan 25 Di was down 5bp at 6.91%. 5y CDS was down 1bp to 129. IBovespa recovered by 0.7% to close at 104,617, breaking a 4-day losing streak. 2nd Preview of July Inflation was above expectations at 0.53%m/m. July CNI industrial confidence was up to 57.4.

MEXICO: Currency finally broke below 19.0, boosted by market expectations for a large Fed rate cut. MXN closed 0.6% stronger at 18.956. Rating agencies lukewarm reaction to PEMEX business plan was mildly supportive for the currency. Spread between 10y Mbono and 10y UST corrected down by 20bp to 554. 1y IRS decreased by 6bp to 7.90%. 5Y CDS was down 1bp to 114. Mexbosal lost 2.0% to close at 41,709.

ARGENTINA: ARS extended gains supported by softer global USD as bets for a quicker easing by the Fed rise. The monetary policy rate dropped 2bp to 58.72%. Bonar 24 decreased 0.25% to 74.01. Merval lost 1.64% to 40,771.

CHILE: Ahead of the BCCH meeting and with the market getting ready for a more dovish BCCH, CLP challenged the positive global backdrop losing 0.31% to 684.25. 1y IRS was 2bp down to 2.17%. 5y CDS was stable at 36. IPSA lost 0.18% to 5,041. The Central Bank of Chile maintained its policy rate unchanged at 2.50%, shifting from neutral to dovish guidance.

COLOMBIA: COP rebounded 0.3% to close at 3,176.9, on the back of regional gains and ignoring oil prices negative trend. 1y IRS was 2bp up to 4.09%. 5y CDS was unchanged at 84. IGBC lost 1.45% to close at 12,842.

PERU: PEN closed the day marginally stronger at 3.2869, benefitting from regional trend and ignoring copper prices drop. 1y NDF was 7bp down to 3.39%. 5y CDS was down 1bp to 50.

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