We’re closing the trading week with limited drivers of global market sentiment, but with the risk tone remaining cautious amid a weak run of macroeconomic data. US equity futures are flat in contrast to a slight rise in European stock indices that are unwinding some of yesterday’s losses through a generally uneventful session.

The USD is mixed, but high-beta FX are seemingly favoured on the back of gains in metal prices (e.g. iron ore +2%) while WTI crude oil trades about 1% stronger. The MXN continues to swing around the 19 pesos per USD level where it may now consolidate its recent losses from the mid-18s when it traded ‘overbought’. Mexico published retail sales data today that showed a 0.2% m/m decline and a 2.4% y/y increase, vs the median forecast of  –0.3% m/m and 2.2% y/y—softening from +0.7% m/m and +2.2% y/y in October.

Thousands took to the streets of Lima yesterday, as protestors from Peru’s south took to the capital their anger and their demands that Boluarte resigns and Congress is closed. In a televised address, the President said the “government is firm and its cabinet is more united than ever, once again I call for dialogue and I call for calm.”

It does not seem like protesters are ready to relax the intensity of their demonstrations as clashes with authorities continue around the country with repeated attempts to take over major airports (Arequipa, for instance). Mining production in the south has stalled, meanwhile, amid a shortage of necessary inputs due to road blockades—that are also limiting the shipment of unrefined product.

The economic costs are becoming clearer by the day and the PEN is a clear underperformer among the expanded majors so far this year, shedding ~1.5% of its value against the USD year-to-date—only surpassed by the Argentine peso’s decline of 3.3% (but that is not enviable company in the world of FX).

Meanwhile, Boluarte’s cabinet seems to be losing track of the President’s intentions as Development Minister Demartini said yesterday that if demonstrators can guarantee social peace will be maintained, then he’s “certain that the President and all of us would resign”. He did, however, add that these conditions have not been met. A couple of hours later he said that the President and cabinet are firm in that resigning is not a possibility. Communications from the top levels of government have been erratic, to say the least.

—Juan Manuel Herrera