ARGENTINA: Progress On Inflation Stalling
Sep-12 11:54
- As well as the slightly larger-than-expected 4.2% m/m increase in headline inflation in August, core inflation also proved sticky, with prices there rising by 4.1% m/m and core ex-food up by 4.3% m/m.
- Looking ahead, JP Morgan says that the reduction of the PAIS import tariff at the start of this month will reduce inflation by 0.6%-0.7% points. However, achieving monthly inflation rates below 3% amid the current capital controls remains a challenge. They see monthly inflation averaging 4.0%m/m ahead, with a modest rebound by year-end/early 2025, assuming a transition into a new policy framework and FX market unification. This would be consistent with 2024 year-end inflation at 127% y/y (vs. 236.7% y/y in Aug).
- Goldman Sachs also notes the stalling of progress on inflation in recent months, with core inflation remaining sticky at 3.7%-4.1% m/m between May and August. Risks around the FX rate, which has moved towards an overvaluation, remain a concern, in their view, as inflation continues to track above the 2% monthly depreciation of the official rate. Tighter monetary policy and a more flexible FX rate regime will be needed to anchor the economy.
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EURIBOR OPTIONS: Put Ladder seller
Aug-13 11:22
ERZ4 97.50/97.25/96.75p ladder, suggest sold at 18 in 6k.
PIPELINE: Corporate Debt Issuance Roundup
Aug-13 11:22
$16.4B Priced Monday, led by Eli Lilly, Caterpillar and BoA, over half of the total high grade issuance estimated for the week. Docket looking bare at the moment with issuers sidelined ahead of PPI data - should accelerate in the near term as the latest earning cycle winds down.
- Date $MM Issuer (Priced *, Launch #)
- 8/12 $5B *Eli Lilly $750M 3Y +35, $1B 5Y +50, $1.25B 10Y +70, $1.25B 30Y +88, $750M 40Y +100
- 8/12 $2.5B *Caterpillar $750M 2Y +47, $500M 2Y SOFR+69, $650M 3Y +58, $600M 5Y +68
- 8/12 $2.5B *Bank of America 11NC10 +152
- 8/12 $1.75B *NatWest $500M 4.25NC3.25 SOFR+130, $1.25B 6NC5 +122
- 8/12 $1.2B *CDW $600M +5Y +137.5, $600M 10Y +168
- 8/12 $800M *CenterPoint Energy $400M 30.5NC5.25 7%, $400M 30.5NC10.25 6.85%
- 8/12 $650M *Equifax +5Y +105
- 8/12 $500M *Principle Life 3Y +80
- 8/12 $500M *Arrow Electronics 5Y +143
- 8/12 $500M *EnLink Midstream 10Y +180
- 8/12 $500M *O'Reilly Automotive 10Y +113
- 8/12 $1.5B JetBlue 7NC3 7%a investor calls
OIL: Harris’ Oil Sanction Policy Likely to Mirror Biden’s: Platts
Aug-13 11:19
A Kamala Harris presidency would likely follow Biden in backing policies to keep Iranian and Venezuelan barrels in the market, experts told Platts.
- "There's no indication a Harris administration would enforce existing sanctions against Iran, Russia or Venezuela more stringently, given similar global conditions," Transversal Consulting’s Ellen Wald said.
- Harris will likely promote a new Iran nuclear deal and would not enforce or widen sanctions if it risked jeopardising a deal.
- Moreover, Harris’ current top foreign policy advisor, Phillip Gordon, was one of the negotiators for Obama’s Iran deal.
- Neither is Harris likely to escalate action against the Houthis, who have upended global trade flows by targeting merchant ships in the Red Sea.
- Conversely, the country facing the highest risk of further sanctions is Russia, Platts said. A President Harris would likely join widening EU sanctions on Russia at the end of this year.
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