Peru’s dollar bonds fell, pushing yields up the most in a month, on concern the struggle of U.S. lawmakers to reach a budget compromise may derail the world’s largest economy and erode demand for emerging-market assets.
The yield on the benchmark 6.55 percent dollar-denominated bond due in March 2037 rose seven basis points, or 0.07 percentage point, to 3.72 percent at 3:12 p.m. in Lima, the biggest increase on a closing basis since Oct. 26, according to data compiled by Bloomberg. The price dropped 1.5 cents to 145 cents per dollar.
The U.S., Peru’s biggest trading partner after China, faces $607 billion in automatic spending cuts and tax increases scheduled to take effect starting Jan. 1 if Congress can’t agree on a plan to avoid the so-called fiscal cliff.
“The deadline is approaching, and there’s still no deal,” said Siobhan Morden, the head of Latin America fixed- income strategy at Jefferies Group Inc. in New York. “We’re heading for a period of more risk aversion.”
The sol appreciated 0.1 percent to 2.5870 per U.S. dollar, according to Deutsche Bank AG’s local unit. The central bank bought $20 million and said on its website it paid an average 2.5879 soles per dollar.
The yield on the nation’s benchmark 7.84 percent sol- denominated bonds due in August 2020 fell two basis points to 4.17 percent, according to prices compiled by Bloomberg. The price rose 0.12 centimo to 123.79 centimos per sol.
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