Snapshot: BRL Consolidates, CLP Underperforms

Steady demand for USDCLP sees a slow 1% grind higher, following the break of the 20-day EMA at 720.20. USDMXN seems to be respecting a narrower trading range between 19.95 – 20.05. USDBRL ascent finally stalls below the 5.50 level trading towards the bottom end of its range, consolidating the aggressive recent move higher.

Similar sentiment has been reflected in Brazilian local swap rates with minor flattening of the curve. Front end yields up between 2-5 bps, potentially following the above expectations Dec Inflation readings, however, central bank rhetoric regarding the lack of change in the fiscal situation has eased pressure on the long end ever so slightly with yields on the 10 year swap contract back under 8% at 7.93%.