Peru’s dollar-denominated bond yields headed for their biggest weekly increase since September as European fiscal and political turmoil discouraged demand for emerging-market assets.
Yields on the nation’s benchmark 6.55 percent dollar bonds due in March 2037 rose three basis points, or 0.03 percentage point, to 4.49 percent at 1:30 p.m. in Lima. They extended their weekly increase to 14 basis points, the steepest since the five days ended Sept. 23. The bond’s price has fallen 2.59 cents from a week ago to 130.66 cents per dollar.
“You have a risk crisis with some levels of contagion with other countries in the south of Europe,” said Alejandro Grisanti, an analyst at Barclays Plc in New York. Investors are selling assets “to seek refuge in U.S. Treasuries,” he said.
The sol has weakened 0.7 percent to 2.6715 per U.S. dollar this week and declined 0.1 percent in trading today, according to Deutsche Bank AG’s local unit.
German Finance Minister Wolfgang Schaeuble said financial turmoil may last another two years, adding to concern Europe’s crisis is worsening. Greece’s credit rating was cut one level to CCC from B- by Fitch Ratings yesterday on concern the politically deadlocked country may not be able to sustain its euro membership.
Moody’s Investors Service lowered the debt ratings of 16 Spanish banks yesterday, citing mounting loan losses and a national recession.
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