May 21, 2024 11:22 GMT
CLP Outperformance Continues, Buoyed By Copper, GDP
CHILE
- The rise in the copper price to a fresh all-time high continued to support the Chilean peso yesterday. USDCLP closed at 888, its lowest level since early January and almost 11% below its mid-April high. Sights are on 886.96, the 76.4% retracement of the Dec 1 ‘23 - Feb 26 bull leg. A break of this level would open $870.45, the Dec 29 ‘23 low.
- The strong 1.9% q/q (sa) expansion in Q1 GDP yesterday also provided support to CLP. This was the strongest reading since Q421, boosted by a 1.4% q/q increase in domestic demand, the first gain in nine quarters. The current account also recorded a smaller than expected $0.1bn deficit in Q1, equating to 0.1% of GDP.
- Goldman Sachs note that although real activity indicators were generally soft in March, the growth momentum at the start of the year was strong. Overall, they believe that the bulk of the macroeconomic adjustment is now behind. Meanwhile, JP Morgan expect a substantial deceleration in Q2, mainly on weaker mining activity and public sector consumption. They see Q2 GDP at +0.5% q/q saar, keeping the economy on course to grow 2.7% this year.
191 words