The Peso was badly hit during the holiday period dropping 4.87% to over 5,000 once again but, no coincidence, as soon as everyone was back to work this week, a sizable rally occurred. This isn’t down to any local speculation, or anything the Petro Government has done, it is Colombia being part of the China-Emerging Market-Commodity cycle, that combined with US data and a weaker dollar; all of this in conjunction with a Peso that was oversold post the Petro election.
Consumer Confidence (-22.3%) from Fedesarrollo for December came in slightly higher than the -26.4% expected and represented a modest reversal upwards from November. Both consumer outlook and economic expectations rose slightly.
In terms of propensity to buy, there was a mixed picture with consumer durables slightly better, housing down, and a gap upwards in the appetite to buy vehicles (from -70.1% to -51.6%). From this one number it is hard to draw any conclusions but there appears to be a stubbornness to both the economy and sentiment that few expected at this point.
The latest financial sector numbers for October saw a 1.3% MoM in the overall loan portfolio but analysts are pointing to another sizable increase in provisions and more especially the 3.05% increase in NPLs MoM; one to keep an eye on.
A few weeks ago, I spoke optimistically about the improving weather. In my defense I mentioned the fragility of the situation, and it was clearly a case of heart over head. Since then, I have reported on a disappointing year for the coffee sector and now the rains have returned once again and maybe here for a few months still. President Petro was forced to cut short his trip to Chile in order to visit Cauca where the Pan-American highway has been blocked by landslides, causing tremendous issues for the local population. Again, a situation to keep an eye on.
Later today the Central Bank will release their latest economist survey which will be watched with interest – where will their call be on the terminal interest rate – a week ago we saw JP Morgan move to 13.5%.
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That is it for this week – have a restful weekend