Brazil and Colombia: Latin American Bond and Currency Preview

By Andrea Jaramillo

July 31 (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 the previous day’s session.

Brazil: Policy makers said yesterday in minutes of their July 21-22 meeting that the benchmark interest rate is at a level that will spur economic growth without sparking inflation, signaling they are prepared to keep borrowing costs unchanged through the end of the year. The central bank this month lowered the key rate by a half-percentage point to a record 8.75 percent.

The real rose 0.9 percent to 1.8766 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 rose four basis points, or 0.04 percentage point, to 8.72 percent, according to Bloomberg prices.

Colombia: The unemployment rate rose to 12.7 percent in June from 12.4 percent a month earlier, according to the median estimate of seven economists in a Bloomberg survey. The national statistics agency is slated to release the report after noon New York time.

The peso rose 1.5 percent to 2,044.52 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell nine basis points to 8.91 percent, according to Colombia’s stock exchange.

Other prices in Latin American markets:

Argentina: The peso fell 0.3 percent to 3.8290 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 fell three basis points to 12.86 percent, according to Citigroup Inc.’s local unit.

Chile: The peso rose 0.7 percent to 541.60 per dollar.

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose one basis point to 2.89 percent, according to Bloomberg composite prices.

Mexico: The peso rose 0.1 percent to 13.2373 per dollar.

The yield on Mexico’s 10 percent bond due December 2024 was little changed at 8.41 percent, according to Banco Santander SA.

Peru: The sol rose 0.1 percent to 2.9830 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 fell one basis point to 5.33 percent, according to Citigroup Inc.’s local unit.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net