Peruvian bonds rose, pushing down yields the most in two weeks, as demand for higher-yielding assets rose after central banks lowered the cost of emergency dollar funding in an effort to ease Europe’s debt crisis.
The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 fell four basis points, or 0.04 percentage point, to 5.71 percent at 12:28 p.m. Lima time, according to prices compiled by Bloomberg. That’s the yield’s steepest fall since Nov. 11. The security’s price rose 0.26 centimo to 114.40 centimos per sol.
Six central banks led by the Federal Reserve moved to ease strains in markets today after the cost for European banks to fund in dollars rose to the highest levels in three years as concerns about a possible breakup of the euro area increased.
The measure sparked “a rally in risky assets,” said Bret Rosen, a Latin America strategist at Standard Chartered in New York.
The sol strengthened 0.2 percent to 2.7 per U.S. dollar from 2.7060 yesterday, according to Deutsche Bank AG’s local unit.
The extra yield investors demand to own Peruvian government bonds instead of U.S. Treasuries fell 10 basis points to 228, according to JPMorgan Chase & Co.