EM LATAM CREDIT: Argentina: IMF Visit - Positive

The NY Fed reports that aggregate delinquency rates for U.S. consumers rose to 4.3% at the end of March, up from 3.6% in Q4, “due to the resumption of reporting student loans on credit reports after a nearly five-year pause”. Transition rates into delinquency look a little more daunting, at the highest since 2015/16 for 30+/90+ day delinquencies. Some details show an improvement though, with credit card and auto loan delinquency transition rates edging lower since mid-2024. 

• The transition rate into 30+ day delinquency increased from 4.14% to 4.87% as the student loan rate increased from 0.87% to 8.19%.
• This 4.87% is the highest since 3Q15.
• For context comparing to pre-pandemic levels, the student loan rate is still 1.1pps below from the 9.44% reported 4Q19 but the overall transition rate is 0.2pps above the 4.67% from 4Q19.
• The main culprits here for increases vs pre-pandemic levels are credit cards (8.75% vs 6.95% pre-pandemic) and auto loans (7.99% vs 6.91%). However, both are down from recent highs seen in mid-2024, -0.3pp for credit cards and -0.1pp for autos.
• There’s a broadly similar story in the transition rate into serious delinquency (90+ days), with the total rate of 2.45% its highest since 1Q16.
• It’s 0.1pp above pre-pandemic levels with offsetting factors from credit cards (+1.7pp at 7.04%), auto loans (+0.6pp at 2.94%) and student loans (-1.2pp at 8.04%). 

• +10,000 SFRU5 95.62/95.75/95.87 put flys, 3.0 ref 95.935
• Update, screen/Block over +22,000 SFRU5 95.81/SFRZ5 95.75 put spds, 1.0-1.5 net

Johnson Redbook retail sales were up 5.8% Y/Y in the month through to May 10 (compared with retailers' target of a 5.4% gain), with sales in the most recent week likewise up 5.8% Y/Y. 

• Once again we have a solid piece of "hard" retail sales data in recent months in contrast with sharp drops in survey-based consumer confidence indicators.
• The latest Redbook report doesn't appear to have any idiosyncratic caveats either, though good weather and purchases of "seasonal items" as well as "notable buying activity for Mother's Day" were noted (though that holiday, and Memorial Day later this month, take place in the same week as 2024 so there shouldn't be any timing effects for the Y/Y comparison).
• With this series representing 80% of "official" retail sales, attention turns to Thursday's Census Bureau release for April which points to flat growth on a M/M seasonally-adjusted basis.
• That would equate to another Y/Y figure close to 5.0%, which would be an undershoot versus the Redbook's 6.7% showing in April but still robust (the two-month March-April Redbook average Y/Y was 6.0%, perhaps a better basis of comparison given the shifting dates of easter between this year and last)..