CHILE: BCCh May Pause In Sept., Codelco Losses From Mine Collapse About $300mn
Aug-14 11:40
- Yesterday’s BCCh minutes confirmed that the central scenario in the latest IPoM remains intact, keeping the door open to another interest rate cut this year. While latest firmer-than-expected CPI data may prompt a more cautious stance from the Board in September, Santander still sees room for a further cut in October or December. Similarly, Itaú expects a pause in September, with the timing of further cuts dependent primarily on tactical factors related to both the local and external environment.
- USDCLP edged down by 0.17% to 954 yesterday, having tested the 950 level earlier in the session. The breach of support at the 50-day EMA, at 955.04, signals a stronger reversal, opening 946.49, the July 23 low.
- In other news, Codelco said that production losses from the collapse at its El Teniente mine on July 31 will amount to around $300mn, with 20,000-30,000 metric tons of lost output. While operations have restarted in areas deemed safe, key sections of the underground mine remain off limits. Codelco Chairman Maximo Pacheco said that he expects operations at the El Teniente smelter to resume today.
- Meanwhile, copper commission Cochilco has left its copper price forecasts for this year and next unchanged at $4.30/lb, citing supply constraints and sustained demand from China and other emerging economies. Chile copper production is expected to reach 5.58mn tons this year, up 1.5% from 2024, rising to 5.75mn tons in 2026.
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EU-RUSSIA: EU Looks To Overcome Slovak Veto On Sanctions With Letter To PM
Jul-15 11:39
Reuters reports that the European Commission has sent a letter to Slovakian PM Robert Fico regarding his opposition to a phase-out in Russian fossil fuels in the EU that threatens the adoption of an 18th package of sanctions on Russia (see "EU-RUSSIA: Foreign Ministers Look To Sign-Off On 18th Sanctions Package", 09:18BST).
- Letter says that the EU "will work with Slovakia to address its concerns" about he phase out. The EU "will clarify how an 'emergency brake' can be triggered if gas prices spike because of scarce supply during the phase out".
- The EU "will develop a solution for cross-border tariffs in the oil and gas trade for Slovakia, aimed at reducing these costs." The letter says the EU "will allow amendments to long-term Russian gas contracts aimed at getting more favourable terms for Slovakia", and that Brussels "is ready to intervene, if needed, during potential litigation resulting from the Russian gas phase out."
- EU foreign ministers are meeting presently in Brussels. Ahead of the meeting, European High Representative for Foreign Affairs and Security Policy Kaja Kallas said, "We are very, very close. I hope it comes today," Regarding the lowered price cap on Russian oil, Kallas said "It's alive...We have made proposals, but it is a question of whether we can overcome the veto of one member state or not. But we are trying to work on that."
- However, CGTN Europe reported earlier that ministers had failed to reach an agreement, with Slovakia and Malta continuing to object.
EURIBOR OPTIONS: Selling Of Both Put & Call Spreads Seen
Jul-15 11:39
Recent flow includes:
- ERU5 97.875/98.00 call spread 14K given at 11
- ERZ5 98.50/98.25 1x2 put spread 4.5K sold down to 6
US: Yields, USD Improve into NY Crossover as Bessent Reassures on China Trade
Jul-15 11:31
Greenback is edging higher into the NY crossover, with gains slightly accelerating on the break above the overnight highs in USD/JPY at Y147.89. Moves follow the appearance from Treasury Secretary Bessent who seemed calm over the looming tariff deadlines (both the reciprocal tariffs deadline on August 1st and the deadline for a settled deal with China on August 12th).
- Markets similarly looking through most of his comments on the Fed chair. Most notably Bessent rebuffed expectations that Trump is looking to fire Powell, but the formal process has already started - which may be helping aide yields off lows and modestly underpin the dollar here.
