LONDON, April 12 (Reuters) – Peru’s financial markets looked set for a rough ride on Monday after socialist candidate Pedro Castillo, who had largely slipped under the radar, took the lead in the first round of the country’s presidential election.
Official results were still to be announced, but exit polls pointed to far-left candidate Castillo facing off against pro-business Keiko Fujimori in a second-round run-off vote in June.
While often politically turbulent, Peru has been one of the more steadfast and reliable markets in Latin America in recent years, attracting international money managers into its bonds and sol currency.
The currency was yet to start trading on Monday but bonds were beginning to react with benchmark Peruvian debt down around 0.5 cents on the dollar and spreads – the risk premium over U.S. Treasuries – widening out around 10 basis points according to traders.
“We did not anticipate a scenario in which an…