EM LATAM CREDIT: Braskem: Petrobras Open to IG4 Proposal - Positive
(B2neg/BB--/BB--)
"Petrobras Open to IG4 Proposal for Braskem Control: Reuters" - Bbg
The proposal relates to Brazil banks holding Braskem shares as collateral for defaulted Odebrecht loans amounting to 51% ownership in Braskem to contribute those shares into a fund run by investment fund IG4.
As part of a transformational corporate restructuring, Petrobras would have substantial control over managerial decisions, unlike the current shareholders agreement where they have almost no control over decisions, and could also involve additional capital injections.
It seems the Novonor discussions with businessman Nelson Tanure will continue as he wants to maintain a small stake in Braskem according to sources of Reuters as reported by Bloomberg.
BRASKM 34s were last quoted 71.55, up a point today but down more than 8 points QTD and down 24 points YTD.
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FED: Powell - Will Receive A Good Amount Of Data In Coming Months
- Overall, "For the time being, we're well positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance. We see our current policy stance as appropriate to guard against inflation risks. We're also attentive to risks on the employment side of our mandate. In coming months, we will receive a good amount of data that will help inform our assessment of the balance of risks and the appropriate setting of the federal funds rate."
- Onto the Q&A.
FED: Powell - Policy Well Positioned
- Powell steps to the podium, starting with the usual language in his opening statement. He says current policy leaves the FOMC "well positioned"
- Echoing the statement, Powell says that "Recent indicators suggest that growth of economic activity has moderated", which "largely reflects a slowdown in consumer spending. In contrast, business investment in equipment and intangibles picked up from last year's pace", though housing remains weak.
- Labor market conditions "have remained solid" and are "broadly in balance".
- Powell notes that inflation readings are "little changed" since the beginning of the year but points out that services inflation has continued to ease but tariffs are "pushing up prices in some categories of goods".
- "Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen." He notes that it "seems" as a base case, the effects from tariffs could be "short lived" for inflation. "But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed."
STIR: Mild Dovish Reaction To FOMC Statement
- Dovish reaction has slowly built to the FOMC statement, but remains limited and already appears contained with some paring of the initial move.
- The largest declines in implied yields are currently 2.5bp (since the decision) through SFRH6-U6, broadly reverses the day’s climb in yields after robust economic data.
- Fed Funds cumulative cuts from 4.33% effective: 17bp Sep (vs 15.5bp pre decision), 28bp Oct, 45.5bp Dec (vs 44bp), 54.5bp Jan and 67bp Mar (vs 65bp).
- One potential added factor at play at least at the margin, Bloomberg also reports that Comex copper prices initially tumbled 16% following Trump signing a proclamation of 50% tariffs on semi-finished copper imports that excluded refined metal.
