(Bloomberg) -- Ecuadorian bonds led gains among emerging-market sovereign peers Monday as traders cheered President Daniel Noboa’s strong showing in Sunday’s referendum. 

Notes due in 2030 jumped about a cent to 69.3 cents on the dollar, according to indicative pricing data collected by Bloomberg.

Noboa’s nine proposals to step up his war on drug cartels passed by a wide majority, according to a quick count published by the electoral authority. That success more than compensated for the rejection of market-friendly proposals to liberalize the labor market and allow international arbitration for foreign investors in the country.

The outcome was closely watched by investors as it’s “a barometer of the support to Noboa’s administration,” JPMorgan Chase & Co. economist Lucila Barbeito wrote in a note Sunday. “The overall test was passed.” 

Optimism is also rising after the government said last week that a new staff-level agreement with the International Monetary Fund will be announced in the coming days. 

The bonds have posted the best sovereign rally in the world this year as Noboa’s overwhelming support to tackle the security crisis has given him room to address fiscal concerns. He’s raised the value-added tax rate and pledged to narrow the fiscal deficit. 

Ricardo Penfold, a managing director at Seaport Global 

  • “The electorate’s response highlights resistance to economic reforms”
  • “The impact on asset prices is expected to be positive, reflecting strong overall support for President Noboa, consistent with pre-referendum polls indicating a 70% approval rating and that the main driver for is support is security and not the economy”

Alejandro Arreaza, an economist at Barclays in New York 

  • “The two rejected questions are precisely those focused on economic issues, which likely gives him a weak mandate to advance on economic reforms”
  • “The honeymoon period of the administration seems to be coming to an end as part of the boost the President received after the security crisis in January, when his approval rating reached nearly 80%, is fading”

Lucila Barbeito, an economist at JPMorgan Chase & Co. 

  • While the rejection of the two questions linked to the economy “could signal challenges ahead to pass economic reforms, it should be mainly attributed, in our view, to difficulties the government had in articulating and communicating a clear campaign message of the actual implications of these reforms”

Jamie Fallon, an analyst at Tellimer in London:

  • “We think there is more upside for the bonds,” amid the prospects of an IMF deal, he wrote in a note Monday
  • “However, we expect political uncertainty to return as the elections get closer, with the recurring spectre of a return of former president Correa (or his nomination)”

--With assistance from Vinícius Andrade.

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