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Renewed Political Uncertainty As Elections Loom

CHILE
  • Following the new 2021 lows around 690, the shine has been taken off the Chilean peso in the prior two sessions. Global risk sentiment has no doubt contributed; however, commentary seems to be centred around potential profit taking amid renewed political uncertainty heading into this weekend's elections.
    • For reference, these include a constituent assembly for drafting a new constitution in addition to mayors, city councillors, and regional governors.
    • We will do a deeper dive into that this afternoon.
  • The only notable event on the docket is the Central bank decision where all analysts maintain their view that rates will be left unchanged at 0.5%.
  • Chile economists see GDP expanding 12% in the second quarter of the year, from 10.8% estimated last month, according to a survey released by the Central Bank.
  • Fitch Ratings has affirmed global scale ratings on selected Chilean banks following a portfolio review. At the same time, the rating outlook for the long-term (LT) Issuer Default Ratings (IDRs) was revised to Stable from Negative.

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