Peru Dollar Bond Yields Rise as Fed Damps Easing Speculation

Peruvian dollar bonds fell, pushing up yields the most in seven weeks, after the Federal Reserve’s improved assessment of the U.S. economy curbed speculation it will begin a third round of bond buying.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due March 2037 climbed six basis points, or 0.06 percentage point, to 4.69 percent at 1:07 p.m. in Lima. That’s the steepest rise since Jan. 24. The bond’s price fell 1.07 cent to 127.18 cents per dollar.

U.S. Treasuries dropped after the Fed said yesterday strains in global financial markets have eased while the domestic labor market has improved, and refrained from new actions to lower borrowing costs. The central bank purchased $2.3 trillion of securities in two rounds of so-called quantitative easing from December 2008 until June 2011.

Peruvian bonds are reflecting “the downward shift in Treasuries and the upward shift in the U.S. yield curve,” said Bret Rosen, a Latin America debt strategist at Standard Chartered Bank in New York. “Peruvian sol and dollar bonds have shifted accordingly.”

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose two basis points to 5.41 percent, according to prices compiled by Bloomberg. The security’s price fell 0.16 centimo to 116.18 centimos per sol.

The sol was unchanged at 2.67 per U.S. dollar, according to Deutsche Bank AG’s local unit.

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

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