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Chile and Colombia Swaps Curves Bear Flatten Following CPI Data

LATAM
  • Rising inflationary pressures will likely cement upcoming rate hikes in both Chile and Colombia.
  • Having recently tempered their hawkish tone, BCCh will find it difficult to ignore the surge in annual headline inflation to 4.5%.
  • In Colombia, BanRep's recent hawkish shift with two members voting for a hike, has been affirmed by their headline rate pushing towards their 4% threshold. Barring a surprise in GDP data, due on August 17, the central bank appears very likely to initiate liftoff in September.
  • Chile Camara Swaps:
    • 1-yr +19 bps at 2.22%
    • 2-yr +13 bps at 2.79%
    • 5-yr +11 bps at 3.67%
    • 10-yr +6 bps at 4.4%
    • 30-yr +5 bps at 5%
  • Colombia IBR Swaps:
    • 1-yr +7 bps at 3.08%
    • 2-yr +6 bps at 3.98%
    • 5-yr +5 bps at 5.05%
    • 10-yr +3 bps at 5.75%

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