COP opened 2% weaker yday but then traded stronger w the broader USD unwind. Spot volume $1.5bio, and offshore volumes were much more muted than in CLP. Spot average for yday was all the way down at 4428, reflecting how little traded on the original gap higher.
Our trader remains long term v bearish COP due to some key pillars; 1/ fiscal is a ticking time bomb, 2/ cutting rates in a higher US yield environment. That said, a lot of USD buying has occurred in the last few weeks, so if USD can stabilize and the broader market starts putting risk back into carry trades, COP is slightly less vulnerable than CLP, for example, given the higher carry and lower trade exposure.
Net net, we are patiently waiting to re-buy USD/COP over coming days.
COP – COP underperformed amongst its LatAm peers against the dollar in today’s NY session having lost -0.09%. USDCOP traded in line with peers opening 1.70% higher and closing +0.19%. We saw mixed flows from fast money accounts while real money were better buyers. Forward points closed lower with strong interest from hedge-funds to receive long end basis.