Commodities Rally, Andean FX Mixed

Market Snapshot

Asset	Level	Change
MSCI Colombia	9.02	+0.00%
MSCI Chile	41.20	-1.06%
MSCI Peru	83.78	+0.54%
USD/COP	3,760.36	+0.31%
USD/CLP	897.22	+0.56%
USD/PEN	3.43	-0.02%
Copper	6.63	+3.38%
Gold	4,724.60	+0.13%
Brent Crude	107.48	+3.14%
Bitcoin	80,450.79	-1.56%
Colombia 10Y Govt Yield	-	-
Chile Short-term Rate	4.50%	+0.00%

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
No events available

Copper and Brent surged over 3%, boosting Chile and Peru's export outlooks while pressuring Colombia's oil-dependent fiscal balance.
Andean equities showed divergence: MSCI Peru gained 0.54%, Chile fell 1.06%, and Colombia held flat amid mixed currency moves.
Colombian peso weakened 0.31% versus USD, Chilean peso depreciated 0.56%, while Peruvian sol strengthened 0.02% on commodity tailwinds.

Yesterday's Recap

Andean markets displayed mixed performance amid commodity volatility, with copper prices jumping 3.38% to $6.63, providing a lift to Chile and Peru equities and currencies. MSCI Peru advanced 0.54% to 83.78, reflecting gains from higher copper and gold prices at $4,724.60, while MSCI Chile declined 1.06% to 41.20 despite the commodity rally, possibly due to local fiscal concerns. In Colombia, MSCI Colombia remained unchanged at 9.02, but USD/COP rose 0.31% to 3,760.36, extending a weekly depreciation trend highlighted in recent reports where the peso fell 3.01%, marking it as the worst performer among emerging markets.

USD/CLP increased 0.56% to 897.22, signaling peso weakness despite copper strength, while USD/PEN dipped slightly by 0.02% to 3.43, benefiting from Peru's mining export surge. Brent crude climbed 3.14% to $107.48, offering marginal support to Colombia's oil revenues but insufficient to offset broader FX pressures. Gold rose 0.13%, aiding Peru's smaller mining sector, though Bitcoin's 1.56% drop to $80,450.79 had minimal regional impact.

Chile's short-term rate held steady at 4.50%, with no new data releases across the bloc.

The Day Ahead

With no major Andean data releases scheduled for today, attention turns to Peru's ongoing electoral developments, as the vote count nears completion at 99.68%, potentially stabilizing political risk premiums. Markets may monitor any spillover from global events, including the Bank of Canada's interest rate announcement at 09:45 ET, which could influence commodity sentiment affecting Chile and Peru. Colombia's EMBI country-risk premium, recently at 294 basis points after a 32-point monthly rise, warrants watching for FX volatility.

Broader Latin American news cycles, as noted in regional pulses, could drive intraday moves in Andean currencies. Investors should eye copper and oil futures for directional cues on export-heavy economies. Tomorrow remains light on events, shifting focus to potential policy signals from Andean central banks.

Other Economic Notes

Persistent inflation in Colombia continues to challenge fiscal balances, with the peso's weakness exacerbating import costs and potentially delaying rate cuts. Chile's lithium sector emerges as a growth driver amid soft prices, though copper dominance sustains external accounts. <i>↓ p.2</i>

Page 1

Other Economic Notes (continued)

Peru's stable macro framework supports investor confidence, but electoral uncertainties could widen sovereign spreads if unresolved.

Global Macro News

Global commodity strength, led by copper's 3.38% gain, bolsters Andean export revenues, particularly for Chile and Peru, amid signals of renewed Chinese demand that could sustain price momentum. Brent's 3.14% rise aids Colombia's oil sector but highlights vulnerability to OPEC dynamics and geopolitical tensions in energy markets. The ECB's deposit rate at 2.00% as of May 12 underscores a dovish European stance, potentially encouraging capital flows to higher-yielding Andean bonds despite regional risks.

Eurozone unemployment at 6.70% reflects labor market resilience, supporting global growth expectations that indirectly benefit Andean commodity exporters through trade channels. Bitcoin's 1.56% decline tempers crypto enthusiasm, with limited direct ties to Andean economies beyond speculative FX impacts. Upcoming Bank of Canada deliberations, including the Business Outlook Survey at 11:30 ET, may signal broader G7 policy shifts influencing Andean central bank strategies.

Colombia's elevated country risk, overtaking Brazil and Peru at 294 basis points, amplifies sensitivity to global risk-off sentiment. Overall, these factors create a supportive yet volatile backdrop for Andean assets.

Andean Central Banks Watch

BanRep in Colombia maintains a hawkish posture amid persistent inflation, with no recent rate changes but ongoing vigilance on FX interventions to curb peso depreciation, as seen in the currency's 3.01% weekly drop. BCCh in Chile, having been the region's most aggressive rate cutter, held its short-term rate at 4.50%, focusing on reserve management to support the peso against commodity fluctuations. BCRP in Peru exhibits stability, with minimal FX moves like USD/PEN's 0.02% decline reflecting credible inflation targeting and limited interventions.

Divergences persist: Colombia's inflation stickiness delays easing compared to Chile's cuts, while Peru's balanced approach minimizes rate path volatility. All three banks prioritize reserve buffers amid global uncertainties, with Chile leveraging copper inflows for added flexibility. Recent reports underscore Colombia's credibility challenges from rising country risk, potentially prompting tighter policy if inflation deviates.

No vote splits were detailed in announcements, but committees across the bloc emphasize data-dependent decisions.

Andeans Macro Daily(Beta Mode)