Peruvian bonds fell, pushing up yields from a record low, as concern that a stalled U.S. budget agreement will harm the recovery of the world’s largest economy sapped demand for emerging-market assets.
The yield on the nation’s benchmark 7.84 percent sol- denominated bond due in August 2020 climbed one basis point, or 0.01 percentage point, to 4.18 percent at 2:55 p.m. in Lima, according to data compiled by Bloomberg. The price fell 0.07 centimo to 123.73 centimos per sol.
President Barack Obama and Congress are negotiating a deal to avoid $607 billion in automatic spending cuts and tax increases poised to begin Jan. 1.
“As long as there’s a sense that there’s no solution to the problem and no agreement in Congress,” investor appetite for Peruvian securities will be diminished, said Diego Marrero, the deputy head of investments at Credifondo SA SAF, Peru’s biggest mutual-fund manager.
U.S. stocks erased an earlier loss today and advanced as comments from Speaker John Boehner and Obama fueled some optimism an accord can be reached in budget talks.
The sol was little changed at 2.5860 per U.S. dollar at today’s close, according to Deutsche Bank AG’s local unit. The central bank bought $20 million in the spot market today and paid an average 2.5880 per dollar.
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