Chilean Camara Swaps Curve Extends Inversion As Front End Pressured

• Following yesterday’s BCCh meeting and the more hawkish action/guidance, local swap rates in Chile are seen higher across the Camara curve. Particular pressure on the front-end has seen the curve invert further with a smaller reaction in the belly and long-end owing to the more optimistic view of a more-moderate Boric administration.
• With geopolitical risk premiums being trimmed and a 2.3% rally in the Russian Ruble, Latam FX is trading resiliently in the face off a hawkish fed and firmer greenback. USDBRL had a strong move down to 5.3540, although much of the Real’s advance has been pared over the last hour.
• The strong move in the dollar index and particular technical weakness for EURUSD is seeing EUR crosses come under pressure. EURMXN is 0.9% lower, pushing on the year’s lows and levels not seen since June 2020.
• Colombia rate decision the clear focus on the calendar to round off the week, before a busy data day on Monday featuring Mexico Q4 GDP.

Below gives key levels of LatAm markets in current trade:

• USDMXN up 0.03% at 20.7518
• EURMXN down 0.73% at 23.1490
• USDBRL down 0.35% at 5.4229
• USDCLP up 0.01% at 801.75
• USDCOP up 0.34% at 3943.55
• Bbg Dollar Index up 0.54% at 1188.3
• USDCNH up 0.51% at 6.3679
• JPMorgan EM Ccy Index up 0.2% at 52.91
• Gold is down $22.35 (-1.23%) at $1797.26
• Copper Futures down 7.8 (-1.73%) at 443.70
• Chile Camara Swaps:
  • 1-yr +33 bps at 6.93%
  • 2-yr +23 bps at 6.3%
  • 5-yr +12 bps at 5.8%
  • 10-yr +7 bps at 5.76%
• Colombia IBR Swaps:
  • 1-yr +16 bps at 6%
  • 2-yr +18 bps at 6.66%
  • 5-yr +15 bps at 7.11%
  • 10-yr +9 bps at 7.41%