Forex - Latam Summary & Highlights February 8.


 21:30 (GMT) 08 Feb

  [Forex Highlights]

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Latam Summary & Highlights February 8. (0101-HXRH-C01)

BRAZIL: Combination of some disappointment regarding the timing of the pension reform and a negative global backdrop pushed BRL weaker by 2.1% on the week to close at 3.725. Di curve widened reflecting both weaker BRL and rather hawkish BCB. Jan 20 Di rose 14bp to 6.51% and Jan 25 Di was up 32bp to 8.87%. 5y CDS was 7bp up to 173. Ibovespa lost 3.2% to 95,343 in the aftermath of Vale sell off after a dam collapse. On Friday, December industrial production was marginally better than expected, but if we put together the changes to previous months leading to a 2018 1.1% reading. December came at 0.2%m/m, -3.6%y/y setting Q4 to a -1.3%q/q, -1.1%y/y reading for the sector.

Latam Summary & Highlights February 8. (0101-HXRH-C02)

MEXICO: MXN was the regional outperformer, gaining 0.3% to close at 19.08, despite negative global backdrop. While investors are still concerned about Pemex finances, the carry offered and Banxico's hawkishness helped the currency. Spread between 10y Mbono and 10y UST fell 7bp to 568. 1y IRS rate closed 4b down to 8.46%. 5y CDS increased by 5bp to 140. Mexbolsa lost 1.7% to 43,226. On Friday, November Investment was worse than expected, dropping -3.2%y/y. November private consumption was also soft at 2.1%y/y. On the positive side, January vehicle production was strong at 9.9%y/y.

Latam Summary & Highlights February 8. (0101-HXRH-C03)

ARGENTINA: ARS weakened 1.77% in the week to 37.837, amid less supportive global backdrop and a total of USD 275 million FX purchases by the BCRA. The currency remains below the lower bound of the no intervention zone, set today at 38.074. The monetary policy rate dropped 620bp to%. Bonar 24 increased 0.11% to 99.8. 5y CDS was 46bp up to 634. Merval lost 0.09% to 36,649.

Latam Summary & Highlights February 8. (0101-HXRH-C04)

CHILE: CLP closed the week 1.03% weaker to 658.89 amid stronger DXY and despite 1.2% stronger copper prices. 1y IRS was 6bp lower to 3.15%. 5y CDS rose 2bp to 49. IPSA lost 1.59% to 5,362. On Friday, January headline inflation came below market expectations and right in ours at 0.1% m/m, 2.2% y/y. Core inflation also met market expectations at 0.4% m/m, 2.4% y/y. INE changed the base year of the series and the change brought confusion as INE reported a 1.8% y/y inflation "for referential purposes", though it suggested in a footnote that the proper figure was 2.2% y/y.

COLOMBIA: COP lost ground in the week with a combination of a large fall in oil prices and DXY rally. Currency lost 0.8% to 3,116.39. 1y IRS was 2bp down to 4.42%. 5y CDS dropped by 1bp to 122. IGBC lost 0.4% to 11,896.

PERU: PEN continued tis positive run and gained 0.2% in the week to close at 3.3226. 1y NDF was 5bp lower at 4.09%. 5y CDS was 2bp higher at 76.


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