As anticipated, not a wild week, especially by Colombian standards.
On the political front there was plenty of jousting but in reality, there were no significant developments – the press during the week was struggling for genuine content either on any issue. What they did sink their teeth into was the mining strike in Bajo Cauca an area where formal gold mining companies such as Mineros operate alongside the informal miners, who they support so strongly, but where crucially the illegal miners, supported by dark forces are also to be found. The government, local authorities and companies continue to seek a solution.
Colombia however, does love an opinion poll and those opposed to Petro are happy to publish them – however a Colombian president polling low numbers is nothing new, this is a poison chalice of a country to run and you will rarely keep many people happy, even some of the time. It is important to take all such polls, positive, or negative, in context.
The week began badly on the macro front. We have grown accustomed to somewhat disappointing Export data and the latest readings for January were again poor. The Departamento Administrativo Nacional de Estadística – DANE Colombia posted total exports of US$3.69bn versus a US$4.15bn estimate – it is even down 2.8% YoY. Of the 4 sectors measured only Manufacturing (0.1%) and Others (+37%) were in positive territory but their relative weightings meant that Agriculture (-9.9%) & Energy/Commodities (-4.5%) towed the numbers under water.
In FOB terms it could have been worse but once again a 17.3% increase in coal sales propped up the commodity sector whilst oil (-19.4%) was again a huge disappointment. In tonnage terms there was an 8,5% decline YoY. This was led in size by Agriculture (-30.5%) but in impact by Commodities (-7.7%) which accounted for 90% of the decline. Oil (- 6.5%) & Coal (-7.9%) both declined.
Bancolombia made a surprise move to lower interest rates on over 1 million credit cards – this of course sat well with Gustavo Petro who has now called upon other banks to follow suit. This is a reaction to high inflation and isn’t far removed from the President’s own attempts to have the energy companies put some ceiling on energy bills.
The Peso thus far (we await Non-Farm Payrolls at the time of publishing) due to the slightly lower than expected inflation print over the weekend, combined with an indifferent dollar and an oil barrel that refuses to completely sink post the Chinese GDP estimate of 5% which disappointed many. Traders are still betting that rates will go up but perhaps only to 13%, as opposed to 13.25% previously.
Wishing you all a good weekend
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