CHILE: Focus Shifts To Elections After BCCh Rate Hold, Sept Unemployment Due
Oct-29 11:54
- Following last night’s widely expected interest rate hold by the BCCh, the Chilean peso has opened moderately firmer against the dollar. A bear cycle in USDCLP remains intact, with sights on 922.67, the July 2 low and a key support.
- While the further pause in the easing cycle may be positive for the peso at the margin, the upcoming presidential election is likely to be more important for the medium-term peso outlook. Recent polls suggest that hard-right candidate Jose Antonio Kast and left-wing candidate Jeanette Jara are likely to advance from the Nov 16 first round vote to a run-off on Dec 14, where Kast is expected to win.
- Analysts broadly believe that a pro-market win for a candidate from the right would be supportive for Chilean assets. Assuming a likely market friendly shift after the election, BBVA believe that the CLP will perform well overall in the coming weeks and would see spikes higher in USDCLP as opportunities to add CLP long exposure, with USDCLP ultimately likely to break below the 940 level after the election.
- Coming up today, advisers to the presidential candidates are due to debate tax proposals at an event from 2130GMT(1730ET). Meanwhile, President Boric is in South Korea for the APEC summit. On the data front, September unemployment rate figures cross at 1200GMT(0800ET), where the market expects a further small decline to 8.5%, from 8.6% in August.
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US TSY FUTURES: BLOCK: More Dec'25 5Y Sales
Sep-29 11:52
- -3,000 FVZ5 109-04.75, sell through 109-05 post time bid at 0738:00ET, DV01 $131,600.
- The 5Y contract trades 109-04.75 last (+3.25).
BOE: Ramsden due to speak at 13:00BST
Sep-29 11:52
Reeves has wrapped up so UK attention now turns towards Dave Ramsden. He is due to appear as a panellist on the policy panel at the ECB / Federal Reserve Bank of Cleveland “Inflation: Drivers and Dynamics 2025 Conference” on Monday 29 September. There is a live stream on YouTube here.
- Alongside him on the panel will be ECB Chief Economist Lane and the Cleveland Fed’s Hammack (2026 voting member).
- We place Ramsden as the most dovish member on the MPC who did not vote for a cut last week – and will be looking for confirmation of this at his appearance today.
- Markets price less than 1bp of cuts for the November MPC meeting and less than 5bp cumulatively by December. We think this is underappreciated the risk of quarterly cuts continuing. But we would September's dovish dissenters but Bailey, Breeden (who speaks tomorrow) and Ramsden to be on board for this to even be a possibility.
US TSY FUTURES: BLOCK: Dec'25 5Y Sale
Sep-29 11:46
- -4,000 FVZ5 109-04.5, post time bid at 0727:30ET, DV01 $175,500.
- The 5Y contract trades 109-05 last (+3.5)
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