OVERNIGHT NEWS
# EUR/USD steady above 1.02 ahead of ECB, NS1 reportedly resumed gas deliveries at reduced capacity of 40%. Italy PM Draghi could resign this morning after coalition partners snubbed confidence vote yesterday, new elections would follow in October.
# Day ahead: ECB to raise depo rate by 25bp, unveil anti-fragmentation tool. South Africa CB forecast to hike75bp to 5.50%, Turkey CB to leave key rate unchanged at 14.0%.
# BoJ keeps policy rate on hold at -0.10%, 10y JGB yield target at about 0%, acknowledges ‘sharp fluctuations’ in FX markets, repeats statement interest rates to remain at their present or lower levels. Core CPI forecast raised for FY22 to 2.3% from 1.9% and for 2023 to 1.4% from 1.1%.
# Nikkei +0.4%, EUR 10y IRS unchanged at 2.046%, Brent crude -0.2% at $106.7/b, Gold -0.8% at $1,688/oz.
Investors brace for choppy day in EUR/USD
Colombia’s domestic public debt rose slightly in June,
to COP422.3trn (USD102bn).
Non-residents’ holdings of Colombia’s public debt
increased by 3.5% last month. As a percentage of
GDP, their share of public debt also increased, by
0.3pp.
The country’s debt maturity profile is concentrated in
short- and medium-term instruments, with an average
duration of 6.03 years. Our breakdown of the debt
maturity profile indicates that almost 84% of the debt
will mature in the next 15 years.
Local pension funds’ AUM fell by 3.7% m/m in June,
mainly dragged down by foreign fixed-income and
local equities.
Structurally, we remain bearish on Colombia, given its
twin deficits, high foreign participation in public debt
and behind-the-curve central bank.
Latin America:
Latam currencies depreciated across the board amid a stronger US dollar during the session. BRL led the weakness, depreciating 1%, to 5.47. PEN followed, depreciating 0.4%, largely driven by USD strength but also amid additional domestic political noise. MXN and CLP were largely unchanged, while COP was closed due to a local holiday but is likely to open weaker in the following session as it catches up to peers.
