Free Trial
US DATA

Small Boost For Mortgages As Rates Dip Further

SONIA

SONIA FIX - 23/11/22

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Morgan Stanley on Peru: Prefer Buying PeruGB Aug 2032s Vs UST May 2032s

PERU
  • MS economists expect another 25bp hike to 7.00%. Policy-makers will remain attentive to new information, including economic activity data and inflation expectations, to decide the next monetary policy steps. Food inflation continues to keep headline inflation elevated while fuel prices are showing some signs of relief, due to lower international oil prices.
  • Looking at forward-implied yields in PEN shows the market pricing a 25bp hike at the upcoming meeting followed by a chance of one more 25bp hike. MS economists are calling for a last hike in this next meeting as real rates ex ante (rates minus inflation expectations 12 months ahead) would be far into the contractionary side, nearing 2%.
  • MS continue to prefer buying PeruGB Aug 2032s versus UST May 2032s as growth remains weak in Peru while US data remain resilient. The yield spread remains elevated on a historical basis.
  • For PEN, BCRP FX swaps maturities are expected to accelerate, which is likely to add some pressure to the currency during the month of October, especially as the BCRP winds down its hiking cycle.
175 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • MS economists expect another 25bp hike to 7.00%. Policy-makers will remain attentive to new information, including economic activity data and inflation expectations, to decide the next monetary policy steps. Food inflation continues to keep headline inflation elevated while fuel prices are showing some signs of relief, due to lower international oil prices.
  • Looking at forward-implied yields in PEN shows the market pricing a 25bp hike at the upcoming meeting followed by a chance of one more 25bp hike. MS economists are calling for a last hike in this next meeting as real rates ex ante (rates minus inflation expectations 12 months ahead) would be far into the contractionary side, nearing 2%.
  • MS continue to prefer buying PeruGB Aug 2032s versus UST May 2032s as growth remains weak in Peru while US data remain resilient. The yield spread remains elevated on a historical basis.
  • For PEN, BCRP FX swaps maturities are expected to accelerate, which is likely to add some pressure to the currency during the month of October, especially as the BCRP winds down its hiking cycle.