Peruvian bonds rose, pushing down yields the most in three weeks, after European Union leaders took steps last week to resolve the euro zone’s debt crisis, boosting demand for emerging-market assets.
The yield on the nation’s 7.84 percent sol-denominated bond due in August 2020 fell five basis points, or 0.05 percentage point, to 4.98 percent at 12:19 p.m. in Lima, according to prices compiled by Bloomberg. It was the biggest drop since June 7. The price increased 0.33 centimo to 118.76 centimos per sol.
Markets in Peru were closed for a holiday on June 29, when South American assets rallied after European leaders agreed to ease repayment rules for Spanish banks and relax conditions on help for Italy. The outcome exceeded investors’ expectations, said Kenneth Lam, a strategist at Citigroup Inc.
“Peru didn’t join the party because it was a holiday so it’s catching up,” Lam said by phone from New York. “With the currency rallying, it should generate some appetite for the bonds too.”
The sol gained 0.5 percent to 2.6510 per U.S. dollar, according to Deutsche Bank AG’s local unit.