During November, foreign investors reduced their holdings of Peru Soberanos bonds by PEN29mn. Total holdings stood at PEN65.2bn, and thus international investors’ participation in Soberanos declined to 50.8% from 51% in October. Although this decline was relatively small, international investors seem to have extended duration along the curve: they sold positions in the belly (Soberanos 29s to 32s) and added in the longer tenors (Soberanos 34s to 40s). That repositioning was reflected in the performance of the curve, as Soberanos 28s to 32s underperformed Soberanos 34s to 40s. Pension funds and insurance companies were the main buyers while banks (including the central bank) were the main sellers. At the last monetary policy meeting on 9 December, the central bank increased the reference rate by 50bp, and although the latest inflation print was a touch higher than consensus, it might start to decelerate, while economic activity could face some headwinds. This could prompt the central bank to slower its hiking pace. A 25bp hike at the January meeting seems more likely.