co} Ugly COP session yday w a proper sell off as fiscal decentralization bill again got everyone’s attention. Px action also exacerbated by a recent pickup in systematic USDCOP buying – yday was the largest systematic flow day we’ve had in weeks.
Spending decentralization bill passed in Senate at end of day and will go back to the House now where it will likely to pass. This will be spread out over 12yr starting 2027, and while perhaps not so meaningful to the bottom line, it shows again the already bleak fiscal story and little hope of being corrected.
The one interesting takeaway yday was Coltes traded well after leading the selloff in prior days. We don’t attribute much to this and expect COP to break >4400 today (where local offers yday capped it).
Our trader still long USD/COP. We cut any receivers we had in fwd curve since we don’t think Banrep can cut more than 50 now given the local backdrop and more RHS offshores flows will need to be digested by the market without significant local USD supply.
