ARGENTINA: JP Morgan Sees Scope To Ease Capital Controls By Year-End/Early 2025
Oct-22 16:58
- The IMF noted earlier today that it sees growth in Argentina starting to gradually recover, and the country’s largest private bank, Banco Galicia, also expects loans to surge this year, according to a report on Bloomberg. The Bank’s CEO Fabian Kon says that if the government gets rid of restrictions on the economy over the coming months, including controls on imports, then inflation will fall and credit will increase.
- JP Morgan also notes that a crowding-in scenario is emerging, with banking credit growing in both local and foreign currencies, which should bolster economic activity. In this context, they say, there is potential to begin easing capital controls by the end of the year or early next year.
- While the administration is cautious about any risks that could disrupt the downward trend in inflation, JPM believes that the benefits of easing controls will outweigh potential risks. In their view, the gradual release of capital controls could open the door to external market access by the second half of 2025, accelerate growth, and help consolidate inflation convergence to single-digit levels by 2026.
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US TSYS: Fed Gov Waller Buoys Rates, Inflation Undershoot Concers
Sep-20 19:34
- Treasuries looked t finish near session highs Friday, bouncing off late morning lows following dovish comments from Fed Gov Waller on CNBC, consistent with the Fed going 50bp at the next meeting in November.
- Gov Waller expressed concern with inflation undershooting, not overshooting, noting firms' limited pricing power and wage inflation coming down, and that inflation is potentially on a lower path that had previously been expected.
- Fed Governor Bowman (voter) has issued a statement explaining why she dissented against the FOMC’s decision to cut the Fed Funds target range by 50bps on Wednesday. Her comments are in firm contrast to Governor Waller’s recent CNBC interview which on the flip side seemed concerned with risks of inflation undershooting.
- Projected rate cuts into early 2025 bounced off early session lows, latest vs. late Thursday levels (*) as follows: Nov'24 cumulative -37.8bp (-35.9bp), Dec'24 -75.0bp (-72.4bp), Jan'25 -108.5bp (-106.5bp).
- Dec'24 10Y Tsy futures are currently +4 at 114-27.5 vs. 114-17 low, still well off initial technical resistance at 115-23.5 (High Sep 11 and the bull trigger). Curves bull steepened, 2s10s +2.480 at 15.242, 5s30s +2.052 at 58.677.
- Looking ahead to Monday brings more Fed speak from Bostic, Goolsbee and Kashkari, data includes flash PMI data from S&P Global.
US: Harris To Deliver Remarks In Atlanta Shortly
Sep-20 19:24
Vice President Kamala Harris is shortly due to appear at an event in Atlanta, Georgia to highlight the state’s abortion ban. The event will be Harris’ first speech since she ascended to the top of the Democratic ticket focused primarily on abortion rights. LIVESTREAM
- AP notes: “About half of voters say abortion is one of the most important issues as they consider their vote – but it’s more important to women who are registered voters than to male voters, according to a new AP-NORC poll. About 6 in 10 women voters say abortion policy is one of the most important issues to their vote in the upcoming election, compared to about 4 in 10 male voters.”
JGB TECHS: (Z4) Bullish Theme
Sep-20 19:14
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 145.95/146.67 - High Aug 6 / High Mar 6
- PRICE: 144.79 @ 18:58 BST Sep 20
- SUP 1: 143.57 - Jul 17 high
- SUP 2: 142.23 - Low Jul 02
- SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing
A bullish outlook for JGB futures remains intact. Strong impulsive gains in early August reinforce this theme and the pullback between Aug 6 - Sep 3, appears to have been a correction. Moving average studies on the continuation chart are in a bull-mode position, highlighting a clear uptrend. A continuation higher would open 145.95, the Aug 6 high and a bull trigger. A reversal lower would instead expose 143.57, the Jul 17 high.
