Peru Bond Yields Decline to Three-Month Low on Europe Outlook

Peruvian dollar bonds rose, pushing down yields to a three-month low, as a surge in German investor confidence bolstered the outlook for Europe’s largest economy and boosted demand for higher-yielding, emerging-market assets.

The yield on the Peru’s benchmark 6.55 percent dollar- denominated bond due March 2037 fell two basis points, or 0.02 percentage point, to 4.71 percent at 1:23 p.m. in Lima, the lowest since Nov. 16. The bond’s price rose 0.35 cent to 126.97 cents per dollar.

German investor confidence surged to a 10-month high as global growth picked up and Europe’s debt crisis showed signs of abating. Reduced risk aversion and investors’ hunt for yield spurred demand for Peru’s foreign-currency debt, said Manuel Aldave, head of investments at Banco Internacional del Peru.

“Investors are desperate for carry,” Aldave said, in reference to the practice of borrowing funds from low-interest- rate countries to buy assets in higher-yielding nations.

Peru’s sol fell 0.1 percent to 2.6865 per U.S. dollar, from 2.6850 yesterday.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.