Forex - Latam Summary & Highlights January 8

 21:42 (GMT) 08 Jan

  [Forex Highlights]

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Latam Summary & Highlights January 8 (0101-QLRT-C01)

BRAZIL: BRL benefitted from the fall in risk aversion the market experienced as it realized that there will be no escalation in the US-Iran conflict. BRL gained 0.4% to 4.052. Di curve dropped across the board with Jan 21 down 3bp to 4.46% and Jan 25 Di down 3bp to 6.41%. 5y CDS dropped by 1bp to 98. IBovespa lost 0.4% to close at 116,236. December IGP-DI came in the low end of market expectations, with a +1.74%m/m, +7.70%y/y reading. Wholesale inflation jumped to 2.34%m/m, +9.63%y/y, with final goods prices correcting upwards from +1.74%m/m to 2.88%m/m as it reflects the surge in commodity prices (from +1.9%m/m to +3.25%m/m).

MEXICO: MXN gained 0.5% in the day to close at 18.81, but was unable to break consistently below 18.80. Gains were based on lower risk aversion as the market considered the conflict between US and Iran was deescalating. However the situation remains fluid. Spread between 10y Mbono and 10y UST was down 6bp to 501. 1y IRS was down by 1bp to 6.99%. 5y CDS was down 2bp to 76. Mexbolsa recovered 0.7% to close at 44,447. In December, vehicle Production and sales posted weaker numbers with a -12.65y/y, -8.3%y/y readings, to close the year at -4.1%, -7.65%, respectively.

ARGENTINA: ARS was virtually stable at 59.816 contained by capital controls. The monetary policy rate closed the day at the 55% floor imposed by the BCRA. Bonar 24 increased 0.90% to 40.1. 5y CDS was 25bp up to 3,469. Merval lost 0.24% to 41,016. November industrial production came at -3.3% m/m, -4.5% y/y. November construction activity posted 1.2% m/m, -5.2% y/y.

CHILE: CLP recovered 0.93% to 762.16 trimming this week's losses by half on hopes that the Iran attack to U.S. bases in Iraq may potentially be conclusive. 1y IRS dropped 2bp to 1.73%. 5y CDS dropped 1bp to 42. IPSA lost 0.07% to 4,910. December inflation came at 0.1% m/m, 3.0% y/y, below expectations. Core prices posted 0.1%m/m, stable in y/y terms at 2.5%.

COLOMBIA: COP rallied 0.8% to 3,246.87, supported by lower risk aversion and ignoring lower oil prices. 1y IRS was down by 4bp to 4.31%. 5y CDS dropped by 1bp to 69. COLCAP was down 0.4% to 1,657.

PERU: PEN recovered 0.2% in the day to close at 3.3152, supported by the large fall in risk aversion after easing in Middle East tensions. 1y NDF increased by 11bp to 3.34%. 5y CDS was down by 1bo to 41.

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