Peru Yields Rise as U.S. Unemployment Decrease Damps Refuge Bid

Peru’s sol-denominated bond yields rose the most in a week, following Treasuries, after the U.S. unemployment rate dropped to its lowest since 2009, curbing the appeal of government securities as a haven.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due in August 2020 climbed two basis points, or 0.02 percentage point, to 4.25 percent at 2:25 p.m. in Lima, according to prices compiled by Bloomberg. The price decreased 0.12 centimo to 123.57 centimos per sol.

“It’s primarily because of Treasuries,” said Diego Llona, a trader at Banco Santander in Lima. “With unemployment at 7.8 percent in the U.S., that encourages investors to move into” higher-yielding bonds and stocks.

The world’s largest economy added 114,000 workers last month after a revised gain of 142,000 in August that was more than initially estimated, while the jobless rate dropped from 8.1 percent, Labor Department figures showed.

Peru’s sol advanced 0.1 percent to 2.5905 per U.S. dollar, according to Deutsche Bank AG’s local unit. That’s the currency’s strongest close since 1997, data from the country’s financial regulator show.

The central bank bought $20 million in the spot market today and said on its website it paid an average 2.5938 per dollar.

The yield on the Peru’s benchmark 6.55 percent dollar- denominated bond due in March 2037 rose one basis point to 3.6 percent, according to Bloomberg prices. The bond’s price fell 0.25 cent to 147.71 cents per dollar.

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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