The global bonds Uruguayans in dollars registered a monthly drop of up to 8% in September, in a context of generalized declines in titles, according to the monitor of AFAP Republic.
The sovereign bonds in dollars They have been falling for several weeks, in line with the present of the economy of USA, which also impacts the local market. In this sense, during September, the prices of long-term bonds registered a monthly drop of around 8%, mainly those titles maturing in 2045, 2050 and 2055.
These movements were in the same direction as the North American Treasuries —which also recorded falls due to monetary policy announcements by the Federal Reserve (Fed)although long-term bonds achieved the highest closes in almost a decade, with the 10- and 30-year benchmarks at 4.57% and 4.70%, respectively.
This difference, in which Uruguayan bonds fell more sharply, also caused the country risk to increase slightly during September, about 9 basis points according to the Uruguayan Bond Index (UBI) —the indicator prepared by República AFAP. These values, however, remain historically low.
How did bonds perform during the last week of September?
During the past week, the bonuses Uruguayan global currencies in dollars, Indexed Units (UI) and long-term pesos registered significant falls. The biggest declines were in sovereign bonds in Dollars: The titles to 2045, 2050 and 2055 fell 2.55%, 2.99% and 3.62%, respectively, in a movement that was also observed in the general analysis of all of September. The 2036 bond, meanwhile, fell 2%.
It was followed by the global bond in pesos for 2033, which registered a decrease of 1.12%. Regarding UI titles, the most significant drop corresponded to the 2040 paper, with a decrease of 0.90%.
The sovereign spread that measures country risk with the UBI rose 4 basis points to 77 bps, where it closed the month with an end-to-end increase of 9 basis points. Meanwhile, the country risk calculated by República AFAP for these securities (IBI), which measures the average spread between the yield of bonds issued in UI by the Uruguayan state and the performance of the TIPS (Treasury Inflation Protected Securities) of the United States government, fell 15 basis points and stood at 49 bps.
Last week the performance of the United States Treasury bondswhich was supporting the dollar, also fell from multi-year highs, a factor that, together with a 27% increase in the price of the Petroleum This quarter, it has helped the greenback turn positive for the year against almost all major currencies.
This Monday, however, Treasury bond yields rose. The US 10-year bond yield rose another 6 basis points to 4.6289%, close to a 17-year high of 4.688% reached last week.
This occurs after the United States Congress approved late on Saturday a provisional financing law with overwhelming Democratic support in an attempt to avoid the fourth partial closure (shutdown) of the Federal government in a decade.
Source: Ambito
