June 23: A Day of De-Risking: Global Macro Commentary | North America

Research evidence excerpt

June 23: A Day of De-Risking: Global Macro Commentary | North America

UpdateMinjection by the PBoC. India rates outperformed even as INR weakened as

much as 0.3% intraday; 1y INR NDOIS yield fell 4bp in a bull-flattening move

as the RBI injected INR1.41tr net liquidity via a 7-day VRR auction (Notified

amount: INR2tr). SGD weakened 0.2%, weighed down as well by lower-than-

expected May inflation, while Singapore rates outperformed with 10y IRS

yield falling 6bp following the global rates rally.

• In LatAm, markets in the region traded mixed amid weaker global risk

appetite. In FX, most currencies underperformed as MXN led losses,

depreciating ~1.30% likely pressured by underperformance in global equities,

while CLP weakened nearly 1.00% before retracing to close around 0.86%

lower as copper fell ~3.90% alongside broader weakness across metals and

risk assets. COP was the only currency to post gains, appreciating ~0.49%

and remaining among the best performers in EM as markets continued to

monitor local headlines following Abelardo de la Espriella’s victory.

• Colombia’s De la Espriella also announced today that Colombia will join

the US-led Shield of the Americas security cooperation initiative

beginning August 7. In rates, COP IBR sold off, with the 5y rising around

17bp and retracing part of yesterday’s rally as the election outcome, while

market friendly, was closer than expected. Brazil outperformed, with Jan 28

DIs grinding ~12bp lower, while most other regional curves traded higher. In

Peru, election headlines remained in focus.

Central Bank Monitor

Developed Markets

• In the UK, BoE MPC Member Taylor said that an extended hold at

the current rate level is the correct and appropriately measured

policy response given the balance of risks stemming from geopolitical