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Natwest Expects Increased Political Uncertainty

CHILE
  • Thirty municipalities in Chile, including two from Santiago metropolitan region, will wake to less strict Covid-19-related restrictions, according to health ministry orders.
  • NatWest is maintaining a bet on Chilean 2-year rate payers amid increased political uncertainty as the country drafts a new constitution, according to a note by strategists
    • If enough political noise emerges from the constitution reform process, Chile's central bank may adopt a more hawkish stance as growth conditions consolidate
      • This should impact mostly the front-end of the yield curve
      • Chilean "assets are too complacent versus constitutional risks"

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