EM LATAM CREDIT: Argentina: Treasury Secretary Positive Comments
(ARGENT; Caa1/CCC/CCC+)
• Bessent sent a signal to markets that more details on U.S. financial support were coming, saying on Twitter that “intensive work” had been done and that he had spoken to Economy Minister Caputo about advancing their discussions. We expect a continued recovery in bonds but to be restrained until further progress on the domestic political front becomes more visible.
• President Milei’s is scheduled to meet in the Oval Office October 14th and also will likely have talks with IMF Managing Director Georgieva at the IMF and World Bank meetings that week.
• Bonds have pulled back in recent days from the initial enthusiasm of U.S. support when they moved 9 points higher on Monday Sept. 22 and got as high as 61 on the 24th, last quoted 53.13. Lack of details on the financial support and a further erosion of confidence in President Milei’s administration led to profit taking.
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Historical bullets
GILT SYNDICATION: 4.75% Oct-35 gilt: Priced
- Reoffer: 98.972 to yield 4.8786%
- Spread set earlier at 4.50% Mar-35 Gilt +8.25bp (guidance was +8.25/+8.75bps)
- Size: GBP14bln (MNI expected GBP8-12bln with risks skewed to the higher end given the large book size)
- Books closed in excess of GBP141bln (inc JLM interest of GBP12bln - second largest ever for a gilt)
- Hedge ratio: 100% vs 4.50% Mar-35 gilt (GB00BT7J0027). Spot ref 97.76 / 4.7961%.
- Maturity: 22 October 2035
- Settlement: 3 September 2025 (T+1)
- Coupon: 4.750% SA, ACT/ACT, long 1st to 22 April 2026
- Benchmark: 4.50% Mar-35 Gilt (ISIN: GB00BT7J0027)
- ISIN: GB00BTXS1K06
- Bookrunners: HSBC / J.P. Morgan (DM/B&D) / Lloyds / Morgan Stanley / NatWest / UBS
- Timing: TOE 12:18BST. FTT immediately
From market source and MNI colour
US TSY FUTURES: BLOCK: Dec'25 10Y Buy
- +5,200 TYZ5 112-04, buy through 112-03.5 post time offer at 0659:37ET, DV01 $340,000.
- The 10Y contract trades 112-04 last (-12).
CROSS ASSET: FTSE, Gilt and the Pound trade in Tandem
- The FTSE, Gilt and the Pound are still moving together, seeing another round of selling interest but nothing fast.
- Fiscal, Financing, Politic Risk, and Concerns on higher borrowing costs, have push Bond traders to demand higher Yields, and has clearly been the driver.
- Gilt still eye the 4.80% level ( initially, and a break through would open to 89.68 Low Jan 15 (cont) next.
(Chart source: MNI/Bloomberg Finance LP).
