In June, international investors increased their holdings of Soberanos bonds by PEN516mn, and their total holdings stood at PEN 57.7bn, in percentage terms their holdings stood at 39% versus 39.6% in May, the slight decrease in percentage terms was related to net new issuance. Indeed, Peru issued a new 2033 bond and conducted a liability management exercise looking to extend duration, international investors bought about PEN 8.2bn of the new issue (roughly 50% of the total), but at the same time reduced positions in Soberanos 26s and 28s which were part of the liability management exercise by close to similar amount. For the month, banks and pension funds were the main buyers. While Soberanos yields moved lower by an average c. 15bp, it was one of the laggards among LatAm peers; bonds at the belly of the curve 2028s to 2032s outperformed short and long-dated bonds. The Central Bank of Peru is facing a challenging environment: inflation is trending lower, but not converging to target, and economic activity is faltering. Moreover, the BCRP remains on the hawkish side without signalling a change on their stand: we would expect any rate cuts to come in September at the earliest. We are cautiously constructive on Peruvian assets; low volatility relative to peers is one of the positives.