Brazil and Chile: Latin American Bond and Currency Preview

The following events and economic reports may influence trading in Latin American local bonds and currencies today. Bond yields and exchange rates are from the previous day’s session.

Brazil: Prices as measured by the IGP-M index fell 0.29 percent in July compared to a 0.1 percent decline the previous month, according to the median estimate of 28 economists surveyed by Bloomberg News. The Getulio Vargas Foundation is slated to release the report at 7 a.m. New York time.

Brazil’s central bank is set to release minutes of its July 21-22 monetary policy meeting at 7:30 a.m. New York time. Policy makers lowered the benchmark interest rate by a half-percentage point to a record 8.75 percent, while signaling the central bank is ready to pause as evidence mounts that economic growth will return.

The real fell 1.1 percent to 1.9014 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 fell three basis points, or 0.03 percentage point, to 8.67 percent, according to Bloomberg prices.

Chile: Industrial output dropped 9.8 percent in June from 10.5 percent the previous month, according to the median estimate of 17 analysts surveyed by Bloomberg.

Chile’s unemployment rate rose to 10.6 percent in June from 10.2 percent in May, according to the median forecast of 18 economists in a Bloomberg survey. The national statistics agency is expected to release both reports at 9 a.m. New York time.

The peso fell 0.6 percent to 545.50 per dollar.

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, was unchanged at 2.89 percent, according to Bloomberg composite prices.

Other prices in Latin American markets:

Argentina: The peso fell 0.2 percent to 3.8195 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 rose 26 basis points to 12.91 percent, according to Citigroup Inc.’s local unit.

Colombia: The peso plunged 2.5 percent to 2,075 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 rose 11 basis points to 9.01 percent, according to Colombia’s stock exchange.

Mexico: The peso fell 0.5 percent to 13.2649 per dollar.

The yield on Mexico’s 10 percent bond due December 2024 rose two basis points to 8.41 percent, according to Banco Santander SA.

Peru: Markets were closed July 28 and July 29 for Independence Day.

The sol rose 0.1 percent to 2.9872 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 was unchanged at 5.34 percent on July 27, according to Citigroup Inc.’s local unit.