The Peruvian presidential election is proving too close to call, with a margin so narrow it might as well be a rounding error. British election monitors have flagged the risk of instability, a phrase that usually precedes capital flight. For those of us watching from the City, the concern is not just who wins, but how the loser reacts.
Markets despise uncertainty, and Peru's recent history of political chaos offers little comfort. The Andean nation's currency and bonds have already taken a hit, and further volatility is likely. Investors should brace for gilt-like uncertainty except without the safe haven status.
