EM LATAM CREDIT: 8 Argentine Corporate Issuers Upgraded By S&P
“Several Argentine Corporate, Infrastructure Entities Upgraded On Improved Transfer And Convertibility Risk Assessment” – Standard & Poor’s
S&P upgraded the following eight issuers to 'B-' from 'CCC':
• Aeropuertos Argentina 2000 S.A.;
• CAPEX S.A.;
• Genneia S.A. (GEN);
• Pampa Energia S.A.;
• Telecom Argentina S.A.;
• Transportadora de Gas del Sur S.A. (TGS);
• YPF Energia Electrica S.A. (YPF Luz); and
• YPF S.A.
Neutral for Spreads
• Standard and Poor’s upgraded the ratings of eight corporate issuers from Caa1 to B- based on lowering their assessment of “transfer and convertibility” risk. The rating agency’s perception has improved regarding the risk of domestically based corporations being able to access or transfer funds abroad thereby lessening their perceived risk to foreign investors of receiving principal and interest distributions.
• The rating agency’s perception has improved based on Argentina’s receding inflation rate, success in maintaining a budget surplus, compression in the differential between the official and unofficial FX rates and efforts to implement meaningful economic structural reforms.
• Yields on these issuers already trade better than the ratings might suggest as the market already anticipated Argentina’s improving credit profile and the perception of increased willingness on the part of the Argentine government to enable domestic entities to pay claims abroad. It is partly why we have seen Argentine corporate bond issuers able to access the international bond market these past months.
Link to the full article:
https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/331966
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EURJPY TECHS: Trend Structure Still Bullish
- RES 4: 166.53 2.0% 10-dma envelope
- RES 3: 166.10 High Nov 6
- RES 2: 165.04 High Nov 15 and a key short-term resistance
- RES 1: 164.40 Intraday high
- PRICE: 163.44 @ 19:52 GMT Jan 7
- SUP 1: 162.46/160.91 20-day EMA / Low Jan 2
- SUP 2: 160.54 50.0% retracement of the Dec 3 - 30 bull cycle
- SUP 3: 159.51 61.8% retracement of the Dec 3 - 30 bull cycle
- SUP 4: 158.67 Low Dec 11
EURJPY has traded higher this week but remains below the Dec 30 high. The recent move down appears corrective and a bullish short-term condition is intact. The next support to watch lies at 160.54, 50.0% of the Dec 3 - 30 bull cycle. The 61.8% level is at 159.51. A resumption of gains would open 165.04, the Nov 15 high. Clearance of this hurdle would expose 166.69, the Oct 31 high and a major resistance.
AUSSIE 10-YEAR TECHS: (H5) Trades Through The December Low
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.851 - High Dec 11
- PRICE: 95.440 @ 19:34 GMT Jan 7
- SUP 1: 95.373 - 0618 proj of the Dec 11 - 23 - 31 price swing
- SUP 2: 95.275 - Low Nov 14
- SUP 3: 94.590 - 1.0% 10-dma envelope
The Aussie 10-yr futures contract continues to trade below the Dec 11 high of 95.851. The contract has traded through the Dec low. A stronger bearish reversal would expose 95.275, the Nov 14 low and a key support. A break of this level would strengthen a bearish theme. For bulls, a reversal higher and a breach of 95.851, the Dec 11 high, would instead reinstate a bull cycle and refocus attention on resistance at 96.207, a Fibonacci retracement point.
COMMODITIES: Crude Gains Ground, Gold Support Remains Exposed
- WTI has gained ground today, amid signs of a tighter-than-expected prompt market. Traders are also keeping an eye on colder temperatures in the US and any impacts on production.
- WTI Feb 25 is up by 1.1% at $74.4/bbl.
- OPEC 12 output in December was 26.46m b/d, down 49k b/d on the month, according to a Reuters survey.
- For WTI futures, recent gains have exposed key short-term resistance at $76.41, the Oct 8 high. On the downside, a reversal lower would expose support at the 20-day EMA, at $71.10.
- Meanwhile, Henry Hub renewed its pull back to trade lower on the day. Despite this, prices remain supported by current cold weather, curtailed production and strong LNG export demand.
- US Natgas Feb 25 is down by 6.2% at $3.45/mmbtu.
- Spot gold has risen by 0.5% to $2,650/oz, amid reports that the PBoC expanded its gold reserves for a second month in December. Bullion held by the central bank rose to 73.29mn fine troy ounces last month, from 72.96mn previously.
- A bear threat in gold remains present, despite the latest recovery, with first firm support to watch at $2,583.6, the Dec 19 low.
- On the upside, a continuation of gains would instead signal scope for a climb towards resistance at $2,726.2, the Dec 12 high.
