Forex - Latam Summary & Highlights August 22.

 20:32 (GMT) 22 Aug

  [Forex Highlights]

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Latam Summary & Highlights August 22. (0101-NNMC-C01)

BRAZIL: BRL gave up gains and closed 1.3% weaker to 4.079, as Fed speakers suggested they are not willing to make more rate cuts down the road. BCB sold US$550mn in the spot market. Di curve was mixed with the front end responding to lower than expected inflation while the back end followed global risk aversion. Jan 20 Di was down by 1bp to 5.39%, while Jan 25 Di was up 4bp to 6.89%. 5y CDS was 1bp down to 136. IBovespa lost 0.9% to 100,315. August IPCA-15 was below expectations coming at 0.08%m/m, 3.22%y/y, pushing bets for more rate cuts. August FGV consumer confidence increased to 89.2. July tax revenue was up 2.6%y/y in real terms to US$137.7bn.

MEXICO: MXN lost 0.8% to 19.834 in the day, as global risk aversion resurfaced. Spread between 10y Mbono and 10y UST dropped by 6bp to 539. 1y IRS was 4bp down to 7.59%, 5y CDS was unchanged at 116. Mexbolsa was up 0.2% to 40,163. August H1 headline inflation was well below expectations at -0.08%h/h, +3.29%y/y with core at +0.11%h/h, +3.77%y/y. Main surprises came from lower food and services inflation. The latter was a reflection of the drop in tourism activities.

ARGENTINA: ARS lost 0.19% to 11.108. Comments by leading presidential candidate Alberto Fernandez that Argentina won't default if he is President and FX intervention in the futures market allowed the currency to outperform regional peers. The monetary policy rate was stable at 74.98%. Bonar 24 decreased 0.74% to 45.6. Merval gained 0.14% to 28,018. June proxy GDP disappointed at -0.4% m/m, 0.0% y/y, wiping out the optimism for a recovery that May's figure had brought.

CHILE: CLP lost 0.36% to 713.51 following the negative regional trend and lower copper prices. 1y IRS increased b y 1bp to 1.88%. 5y CDS was stable at 37. IPSA lost 0.95% to 4,739.

COLOMBIA: COP dropped 0.4% to 3.389.97, following the emerging market selloff. 1Y IRS rate was up by 1bp to 4.16%. 5y CDS was 1bp down to 97. IGBC lost 0.9% to 12.390. Retail confidence dropped to 25.8, but industrial confidence rebounded to 9.3.

PERU: PEN gained 0.1% to close at 3.3747, going against the grain with regional peers. 1y NDF was 2bp down to 3.22%. 5y CDS was unchanged at 50.

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