Peru Dollar Bonds Drop as U.S. Retail Gain Damps Stimulus Bets

Peru’s dollar bonds fell, pushing yields to three-week high, as a report showing U.S. retail sales rose in July more than forecast damped speculation the Federal Reserve will add to its monetary stimulus.

The yield on Peru’s benchmark 6.55 percent bond due March 2037 rose nine basis points, or 0.09 percentage point, to 3.82 percent at 12:15 p.m. in Lima, according to data compiled by Bloomberg. The price fell 1.79 cents to 143.25 cents per dollar.

The yield fell to a record low 3.60 percent on Aug. 3 as speculation the Fed will step up bond purchases to support the world’s biggest economy spurred demand for emerging-market debt. U.S. retail sales rose in July for the first time in four months and exceeded forecasts, Commerce Department figures showed today in Washington.

“The data have been getting better,” said Enrique Alvarez, the head of Latin America fixed-income research at IdeaGlobal in New York. “The bets are still in favor” of another round of bond purchases, “but the odds of it happening have diminished.”

The sol was little changed at 2.6168 per U.S. dollar, according to prices compiled by Bloomberg.

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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