Peru Elections Uncertainty Lingers

Peru's presidential runoff remains deadlocked with a 0.05pp margin, leaving markets in suspense until the July 15th official result. BofA maintains a pro-market stance with a long PEN trade and positive equity outlook based on copper price support.

Key Takeaways

• 1.The Peruvian presidential runoff is extremely close (0.05pp difference), creating significant political uncertainty until official results on 15 July.
• 2.BofA maintains a long PEN trade recommendation and remains positive on equities, citing macro resilience and a constructive metals outlook.
• 3.Economic policy proposals differ significantly, with Sanchez favoring a new Constitution and state expansion, versus Fujimori's focus on deregulation and macro discipline.

Table of Contents

• Key takeaways
• An extremely tight election, like no other in LatAm
• No minimum vote margin that triggers recount
• Fujimori showing higher probability in prediction markets
• Relief for the mining sector reflected in equity prices
• Peru election may be marking the consolidation of a trend
• Clearer picture of economic policy under Fujimori
• Guidance on fiscal policy is a bit mixed though
• Risk of capital outflows has diminished substantially
• Sanchez says he represents Castillo
• Sanchez and Castillo's economic proposals seem similar
• Sanchez has changed his proposals on monetary policy
• Successor of Velarde under Sanchez scenario
• FX Strategy
• Equity Strategy: Higher copper prices driving returns

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