© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

CANADA GIVING UKRAINE CAD650 MILLION OVER 3 YEARS

FED'S DALY SAYS PATIENCE IS A PRUDENT STRATEGY RIGHT NOW

MNI BRIEF: ECB “Can’t Rule Out Cuts” On Latest Info - De Cos

EZ/UK T-Bill Calendar: Germany And France To Issue On Monday

MNI: US SEP FLASH S&P MANUF PMI 48.9 (FCST 48.2); AUG 47.9

MNI: CANADIAN JUL RETAIL SALES +0.3%; SALES EX-AUTOS/PARTS +1.0%

MNI BRIEF: Canada Shows No Progress Closing Housing Shortfall

MNI BRIEF: Highlights From BOC Governor Macklem Speech

MNI BRIEF: Finance Minister Calls BOC Pause 'Welcome Relief'

Goldman Sachs: China Reopening More Friendly For CLP & PEN Than COP

LATAM FX
  • As news around China reopening has accelerated, CLP (and, to a lesser extent, PEN) have outperformed most major currencies on a spot basis, while COP has seen spot losses versus the Dollar.
  • Some of this reflects idiosyncratic factors, which may continue to drive FX moves in coming days: in Peru, most notably, the Sol is likely to remain subject to domestic volatility, given that the political backdrop is likely to remain unstable, and the policy direction of the new administration isn’t yet clear after Castillo’s removal from office.
  • Much of the differentiation across Andean FX, however, reflects global factors, and in particular the ‘copper up, oil down’ price action we’ve seen as signs of China’s reopening has progressed.
  • Going forward, Goldman Sachs expect China’s reopening to be a bumpy one, judging by the experiences of Hong Kong and Taiwan, but as investors increasingly price the medium-run effects of an eventual easing of covid restrictions, it is worth remembering that i) China’s share of global demand is far larger for copper than for oil, ii) China’s easing of covid measures are coming alongside other measures that could provide some much-needed and copper-friendly relief to China’s property market, iii) after absorbing significant negative news in 2022, limited capacity for mining expansions may limit copper supply, and iv) copper prices may be quicker to price in positive news on China reopening than oil prices.
  • As previously flagged, GS think left tail risks are higher for COP than for CLP or PEN; while they will continue to monitor risks—including any speedbumps to a continued disinflationary path in Chile, or further political volatility in Peru—price action in the past few weeks suggests that an extension of positive sentiment around China reopening could continue to support this relative view within the Andeans.
BulletEM BulletEmerging Markets NewsHomepage
BulletEM BulletEmerging Markets NewsHomepage

To read the full story

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.