In July, foreign investors increased their holdings of Peru Soberanos by PEN1.7bn and with it broke the trend witnessed in recent months where they were net sellers. In percentage terms, international investors’ holdings increased from 44.5% in June to 45.9%. These investors seemed to have more appetite for bonds in the belly of the curve, adding the most positions in Soberanos 31s to 34s, but the curve performance did not fully reflect that with some bonds barely outperforming the rest of the curve in a month when bond yields were higher by c.107bp on average. While local pension funds seem to be the largest sellers and “banks” the larger buyers, most of this repositioning is explained by repo transactions between pension funds and the Peruvian central bank. The Soberanos curve has remained under pressure even after President Castillo took office. Delays appointing his finance ministry and questions about future economic and other policies continue to weigh on investors’ minds and it is this type of uncertainty that could affect the performance of the Soberanos curve, in our view.