Peru Jumps on Humala Appointment

Peruvian assets rallied Monday on news that President-elect Ollanta Humala had asked central bank president Julio Velarde to stay in his post for another five years, signaling a continuation of market-friendly policies that preceded his presidency. Investors also found further comfort in talk that Humala would possibly appoint deputy finance minister Luis Castilla as economy minister. “(This) consolidates market expectations of policy continuity and allows for a further reduction in policy risk premium and convergence of credit spreads to peers,” notes RBS in report. Humala is expected to officially announce his cabinet appointments Wednesday. The Peruvian stock market leapt 4.62% to 21,285, while the sovereign bond curve jumped a good ¾ of a point, with the 2019s ending the day at 121.25-122.00, according to one trader.