International investors reduced their holdings of Peru Soberanos during October, to 42.7% in terms of total participation compared with 43.5% in September. In nominal terms, this reduction in positions amounted to approximately PEN858mn and total holdings now stand at PEN57.7bn. Foreigner investors have only added positions in three months since the start of the year (February, May, and August), while they have reduced their holdings in the remaining months, and have sold the largest positions in Soberanos 28s and 31s. During the month of October, banks appear to have been the main sellers and pension funds the main buyers, but the numbers are a bit misleading given the rotation of repo positions. Based on the expectations of central bank hikes, yields at the very front of the curve moved higher while yields along the rest of the curve moved lower with a bull steepening bias. The PEN and local rates performed relatively well compared to other peers, but international investors do not appear to be paying much attention to this, political noise remains a distraction, and some investors might be anticipating a potential new bond issuance, although it is unclear whether this would be in PEN or USD.