Peruvian bonds fell, pushing up yields the most in nine weeks, as concern Europe’s debt crisis will damp global growth curbed demand for higher-yielding, emerging-market assets.
The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose four basis points, or 0.04 percentage point, to 4.23 percent, according to data compiled by Bloomberg. That’s the steepest rise since July 24. The price declined 0.31 centimo to 123.80 centimos per sol.
Emerging-market debt yields rose and most currencies from developing nations fell against the dollar after German Chancellor Angela Merkel and French President Francois Hollande clashed over the weekend on a timetable for starting joint oversight of banks in the European Union. Data from China and Germany signaled the global economic slump is deepening.
“What’s happening in Europe could put more pressure on Peruvian bonds,” said Hedmond Rios, an economist at Celfin Capital in Santiago. “It could be a transitory pause. A lot more liquidity is expected to enter the market” because of the bond-buying plan unveiled by the European Central Bank this month, Rios said.
The sol was little changed at 2.5980 per U.S. dollar at today’s close, according to Deutsche Bank AG’s local unit.
Peru’s central bank bought $100 million in the spot currency market today to stem gains in the sol. The bank said on its website it paid an average 2.5967 soles per U.S. dollar.
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