EM LATAM CREDIT: Argentina: YPF Case - Neutral
(ARGENT; Caa1/CCC/CCC+)
"*ARGENTINA WON'T NEGOTIATE WITH PLAINTIFFS IN YPF CASE: ADORNI" - Bbg
The U.S. Dept of Justice supported Argentina in the appeal to prevent handing over its 51% YPF stake so it is likely the government will succeed in extending the appeal process overall.
Meanwhile it seems the government doesn't want to settle and will leave it to the courts to decide if former YPF minority shareholders were entitled to compensation as a result of the expropriation action taken by a former administration.
ARGENT 2035s were last quoted USD64.75, up 1/2 point today following through from late yesterday's double notch upgrade by Moody's. The reasons cited by the rating agency were all well known by the market already so reaction has been muted.
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US DATA: Business Inflation Expectations Contained In June – Atlanta Fed
The Atlanta Fed’s Business Inflation Expectations survey for June (in-depth report, here) continued to show relatively modest impacts from US tariff policy.
- Firms’ 1Y ahead inflation expectations, defined in the details as the mean change in expected unit costs over the next 12 months, fell to 2.42% in June from 2.54% in May.
- It’s down from a recent high of 2.76% in April (highest since Jul 2023) for the lowest since February but still a little above the 2.24% averaged in 2024 for context.
- The increase and subsequent pullback is more in keeping with a modest increase in consumer expectations from the NY Fed’s survey as opposed to the sharper climbs in the U.Mich survey and less so Conference Board survey.
- This release also sees the quarterly question for firms’ long-run unit cost inflation expectations 5-10Y ahead, with it unchanged at 2.8% from the March survey. It’s up from Q4 low of 2.6% (lowest since 3Q20) but has only increased back to the 2.8% averaged since the survey started in 2012 through 2019.
- The combination points to a more mellow uptick in inflation expectations compared to sharper increases in prices paid components of ISM manufacturing and services surveys as of May.
FED: US TSY 8W BILL AUCTION: HIGH 4.470%(ALLOT 16.95%)
- US TSY 8W BILL AUCTION: HIGH 4.470%(ALLOT 16.95%)
- US TSY 8W BILL AUCTION: DEALERS TAKE 48.72% OF COMPETITIVES
- US TSY 8W BILL AUCTION: DIRECTS TAKE 9.12% OF COMPETITIVES
- US TSY 8W BILL AUCTION: INDIRECTS TAKE 42.16% OF COMPETITIVES
- US TSY 8W BILL AUCTION: BID/CVR 2.70
FED: US TSY 4W BILL AUCTION: HIGH 4.060%(ALLOT 48.91%)
- US TSY 4W BILL AUCTION: HIGH 4.060%(ALLOT 48.91%)
- US TSY 4W BILL AUCTION: DEALERS TAKE 18.15% OF COMPETITIVES
- US TSY 4W BILL AUCTION: DIRECTS TAKE 2.93% OF COMPETITIVES
- US TSY 4W BILL AUCTION: INDIRECTS TAKE 78.92% OF COMPETITIVES
- US TSY 4W AUCTION: BID/CVR 3.15
