Argentina, Chile: Latin America Bond and Currency Preview

By Jamie McGee

July 4 (Bloomberg) -- The following events and economic reports may influence trading in Latin American local bonds and currencies today. Bond yields and exchange rates are from a previous session.

Argentina: Congress probably will vote today in its lower house to affirm a tax increase on crop exports imposed by the administration by decree four months ago, an opposition party legislator said.

Congressional deputies supporting President Cristina Fernandez de Kirchner will likely ratify the increase, said Christian Gribaudo, vice president of the lower house's agriculture committee and a member of the opposition PRO party. Farmers ended roadblocks and resumed grain shipments last month as Fernandez sought the backing of Congress for the tax.

The peso fell by 0.3 percent to 3.0270 per dollar.

The yield on the country's inflation-linked peso bonds due in December 2033 gained 6 basis points, or 0.06 percentage point, to 9.955 percent, according to Citigroup Inc.'s unit in Argentina.

Chile: The annual inflation rate accelerated to the fastest pace since 1994 in June, cementing expectations that the central bank will raise interest rates next week for a third time this year.

Consumer prices rose 9.5 percent in the 12 months through June after increasing 8.9 percent in the year through May, the government said. The inflation rate was higher than the 9.1 percent median estimate of 14 economists in a Bloomberg survey.

The peso rose 1.5 percent to 509.23 per dollar.

The yield for a basket of five year peso bonds in inflation- linked currency units, called the unidades de fomento, stayed at 2.84 percent, according to the Bloomberg composite prices.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net