EM LATAM CREDIT: Bolivia: CAF USD3.1bn Five-Year Financing – Positive
(BOLIVI; Ca/CCC-neg/CCC-neg)
• The CEO of Latin American development bank CAF (Corporacion Andina de Fomento) met with the newly elected reformist president-elect of Bolivia Rodrigo Paz and pledged up to USD3.1bn over the next five years, of which 15% would be made available in the short term.
• BOLIVI 30s were last quoted at $84.29, up only .75 points today as the market still expected a debt restructuring. Bonds are up 15 points since June 30th and up 23 points YTD, leading up to and after the election of a market friendly, more conservative president in August 2025.
• Bolivia has been in a stressed financial situation for years having followed an interventionist govt economic model, so the president-elect will be challenged to revive economic growth, lower inflation and secure external funding. The fiscal deficit was 11.2% in 2024 and the economy contracted 2.4% in 1H 2025.
• The country has a USD333mn March 2026 bond amortization coming due as well as over USD400mn in debt payments in each of the next two years and then USD677mn in 2028, yet Bolivia only has USD103mn in reserves as of Sept. 2025 according to Americas Quarterly.
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ASIA: Coming Up In Asian Markets On Monday
| 0430BST | 1130HKT | 1430AEDT | Thailand Sep CPI |
| 0600BST | 1300HKT | 1600AEDT | India Sep F HSBC PMI Services |
Source: Bloomberg Finance L.P/MNI
ASIA: Coming Up In Asia Pac Markets On Monday
| 0100BST | 0800HKT | 1100AEDT | New Zealand ANZ Sep Commodity Price |
| 0100BST | 0800HKT | 1100AEDT | Australia Sep Melbourne Institute Inflation Gauge |
Source: Bloomberg Finance L.P./MNI
JAPAN: Yen Slumps On Surprise Takaichi Victory, Focus On Fiscal/BOJ Outlook
Japan markets will be in focus in the first part of Monday trade, following Sanae Takaichi's victory in the weekend LDP leadership election. This is no doubt a surprise to the market given market odds, per Polymarket were firmly in favour of Koizumi winning the race. His odds were at 82 on Friday, versus Takaichi who was at low of 12 before Saturday's vote.
- An extraordinary session of the Diet will be held around Oct to choose a new PM. Goldman Sachs notes: "Since Ms. Takaichi has stated that the LDP and Komei coalition comes first, but would consider adding parties that share the same basic policy philosophy to the coalition, we assume that the minority government formed by the LDP-Komeito ruling coalition will continue, seeking cooperation from opposition parties on a case-by-case basis."
- However, it adds that given Takaichi's policy bias around pro-fiscal policy it could expand the coalition to include like minded parties, such as the Democratic Party for the People.
- This will be a key focus points for markets, given Takaichi's historical position around supporting fiscal policy to support growth. Her stance appeared to soften somewhat as the leadership campaign unfolded, she is expected to focus on cash handouts and tax rebates for households to reduce cost of living pressures. Via BBG: "While saying her spending plans will be “responsible” and that she’ll ensure the nation’s net debt load will fall over time, she said “the goal is achieving economic growth, not fiscal health,”
- This comes at a time when fiscal policy uncertainty has already been elevated in Japan, with the JGB yield curve just off historically steep levels.
- On the BoJ, via BBG: "In the latest leadership campaign, she toned down her scathing views on the Bank of Japan’s interest rate hikes from last year, when she described its raising of rates as “stupid.” But in a recent Kyodo survey she still said the BOJ should leave interest rates unchanged for now."
- This has helped drive USD/JPY higher this morning, up 1.4% to 149.50/55, with end Sep highs just short of 150.00 now in focus.
