Peru Yields Fall to Month Low on U.S. Stimulus View; Sol Climbs

Peru’s sol-denominated bonds rose, pushing yields to the lowest level in a month, on speculation the U.S. central bank will maintain its stimulus effort, boosting demand for emerging-market debt.

The yield on the benchmark 7.84 percent sol bond due in August 2020 declined one basis point, or 0.01 percentage point, to 3.75 percent at 2:28 p.m. in Lima, the lowest level since March 5, according to data compiled by Bloomberg. The price climbed 0.08 centimo to 125.89 centimos per sol.

“There’s going to be increasing appetite” for Peru’s bonds among foreign investors, said Alvaro Vivanco, a strategist at Banco Bilbao Vizcaya Argentaria in New York. The Andean country is “benefiting from a global environment that’s still supportive for fixed income.”

The U.S. Labor Department reported on April 5 that payrolls increased by 88,000 jobs in March, smaller than the most pessimistic forecast of economists surveyed by Bloomberg, giving the Federal Reserve reason to press on with $85 billion in monthly bond purchases.

The sol appreciated 0.3 percent to 2.5750 per U.S. dollar at today’s close, according to data from Datatec. The central bank bought $80 million of U.S. currency today and said on its website it paid an average of 2.5769 soles per dollar.

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