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Chile Investors Flock to CPI-Linked Notes on Oil Shock

Carolina Gonzalez
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⚡ Quantum Brief
Chilean investors are rapidly shifting capital into inflation-linked bonds after Iran’s war triggered a historic 54% fuel price surge—the largest since 1980—sparking fears of soaring consumer costs. Nearly 80% of analysts and traders now favor bonds tied to Unidades de Fomento (UF), Chile’s inflation-indexed unit, the highest preference since October, per a Bloomberg poll. Only five respondents backed traditional peso-denominated bonds, signaling strong market skepticism toward non-inflation-protected assets amid escalating economic uncertainty. The government’s fuel hike, announced last week, directly responds to global oil shocks, pushing investors to hedge against eroding purchasing power via CPI-linked instruments. This flight to inflation-protected securities underscores Chile’s vulnerability to geopolitical energy disruptions and rising inflationary pressures in early 2026.
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000War With Iran:Chile’s government raised fuel prices by as much as 54% last week.Chile fixed income investors are wasting no time, plowing money into inflation-linked assets after the war in Iran triggered the biggest jump in gasoline prices at the pump since at least 1980.Almost 80% of the 23 analysts and traders polled by Bloomberg last week said they favor bonds denominated in Unidades de Fomento — an inflation-linked accounting unit — the highest percentage since October. Only five respondents said they would opt for peso bonds.

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Source: Bloomberg

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