EM LATAM CREDIT: Argentina April Inflation Better Than Expected
Republic of Argentina (ARGENT; Caa3 pos /CCC /CCC+)
April inflation was better than expected: Positive take
• April CPI 2.8% vs 3.2% expected, following last month’s disappointing 3.7% rise in consumer prices driven by education, food and beverage prices.
• Trailing twelve months 47.3% vs 47.95% expected and 55.9% the previous month.
• As a leading indicator, the City of Buenos Aires already reported 2.3% inflation for April, down from 3.2% in March.
• Buenos Aires CPI 2.8% vs March 3.9% and 47.7% YoY vs previous 57%.
• The Argentina government lifted almost all capital controls the middle of last month following the USD20bn agreement with the IMF so this month we can see the impact of FX changes on inflation.
• Since then, the official FX rate has gravitated from 1100 to 1150 while the unofficial Blue Chip rate was last quoted 1165 down from a peak of about 1350 prior to the change in FX policy.
• IMF projects 35.9% consumer price inflation for 2025.
• Please see our post last month on the March inflation report for more information:
https://mni.marketnews.com/3H83Bdr
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EURJPY TECHS: Trend Outlook Remains Bullish
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger
- PRICE: 162.88 @ 15:53 GMT Apr 14
- SUP 1: 160.98/158.30 50-day EMA / Low Apr 7
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
Recent weakness in EURJPY appears corrective and the strong rally from the Apr 7 low reinforces a bullish theme. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a continuation higher would expose 164.19, the Mar 18 high and the bull trigger.
US TSY FUTURES: BLOCK: Jun'25 5Y Sale
- -5,000 FVM5 108-02.75, post time bid at 1447:35ET, DV01 $216,000
US TSYS: Late Equities Roundup: Fading Underlying Rally
Option desks reported mixed SOFR & Treasury option flow Monday, a pick-up in downside SOFR puts in the second half - faded the steady rise in underlying futures. Treasury options more pared but appeared to lean toward call buying and vol sales. Underlying futures quietly extending highs in late trade. Little change in projected rate hike pricing: current levels vs. this morning (*) as follows: May'25 at -5p (-5.75bp), Jun'25 at -22.3bp (-21.6bp), Jul'25 at -41.1bp (-39.4bp), Sep'25 -59.7bp (-55.8bp).
- SOFR Options:
- +10,000 SFRZ5 95.37/95.62 put spds, 1.5 ref 96.515
- +5,000 SFRZ5 95.37/95.62 put spds, 1.5 ref 96.51
- Block, 5,000 SFRZ5 95.50/95.62/95.75 put flys, 1.0 ref 96.51
- 1,500 SFRM5 95.56/95.62/95.68 put tree ref 95.925
- Block, 5,000 SFRU5 95.43/95.75 put spds, 3.0 ref 96.26
- +5,000 0QN5 96.81/96.93/97.68/97.81 call condors, 3.25 ref 96.67
- -3,500 SFRU5 96.00 puts (x4) vs SFRZ5 97.00/98.00 call spds, 3.0 net, Sep over
- -4,000 SFRK5 95.81 puts, 4.25 ref 95.905
- +5,000 SRN5 95.87/96.00 put strip, 14.5-15.0 ref 96.22
- -3,000 0QU5/0QZ5 96.00 put strip, 27.5 (legs covered)
- -3,000 SFRM5 95.68/95.87 put spds vs. 95.905/0.27%
- -5,000 SFRK5 95.75/95.87/96.00 put flys, 2.75 ref 95.91
- 3,000 0QQ5 97.00/97.50/98.00 call flys ref 96.655
- 1,500 0QM5 97.00/97.25 call spds ref 96.655
- 3,000 SFRM5 95.81/0QM5 96.12 put spds
- 5,000 SFRU5 95.62/96.06 put spds ref 96.25
- Treasury Options:
- 2,500 USK5 117/118 call spds, 5 ref 114-08
- 1,500 USK5 114.5/115.5/116 1x3x2 broken call flys
- 4,000 TYM5 114/115.5 call spds, 7 ref 110-08
- 3,100 FVM5 106/106.5 put spds vs. 108.5/109 call spds ref 107-20.75
- 4,500 TYK5 109.5/111.5 strangles, 37
- 8,000 TYM5 111/113 call spds, 24 ref 110-03
- over 11,800 TYK5 110 puts, wide range from 49 to 38 last
- over 15,300 TYK5 111 calls, 18 ref 110-05
- -7,000 TYK5 106.75 puts, 3-2 ref 109-31.5
- 3,000 USK5 109/112 put spds
- 4,000 FVM5 108/108.5/109/110 broken call condors ref 107-17
- 4,500 FVM5 106 puts, 18 last
- 2,000 Mon wkly 111/112 call spds
