EM LATAM CREDIT: Braskem: Q3 2025 Earnings + Developments - Negative
(BRASKM; Caa3neg/CCC-neg/CCC+)
• Net debt/EBITDA increased to 14.76x from 10.59x the previous quarter and 5.76x a year ago. Persistent cash burn continued with cash usage USD375mn for the quarter caused by higher operational capex, increased interest costs and payments for the Alagoas environmental liability. We didn’t see much good news in this latest earnings release with margins compressing further and sales continuing to be much weaker than a year ago. A debt restructuring is likely, and the company reportedly has guided to a January 2026 time frame.
• BRASKM 34s were last quoted at $39.61, up 2.5 points today and near the upper end of the recent trading range of $32-42 since the company announced the hiring of financial and legal advisors in late Sept. 2025. The market reacted to a resolution with the State of Alagoas for environmental liabilities, though it doesn’t preclude new lawsuits coming forward. Also perceived as positive were news reports, which the company said it was unaware of, that major shareholder Novonor (aka Odebrecht) was nearing the sale of its 50.1% stake in Braskem.
• Major Brazil banks hold Braskem common stock as collateral for previously defaulted Odebrecht loans and were reportedly close to selling the stake to investment firm IG4 Capital. Petrobras, with a 47% stake, has previously signaled that it was waiting for that event to proceed with a new shareholders agreement that would give it more decision making control over Braskem which investors view positively and which impacts the longer run going concern cash flow estimates post restructuring for Braskem. Novonor denied any major developments had occurred according to Bloomberg.
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USDCAD TECHS: Bullish Trend Structure
- RES 4: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.4111/39 High Apr 10 / 3.0% Upper Bollinger Band
- RES 2: 1.4072 Bull channel top drawn from the Jul 23 low
- RES 1: 1.4034 High Oct 9 and 10
- PRICE: 1.4029 @ 15:56 BST Oct 13
- SUP 1: 1.3916/3856 20- and 50-day EMA values
- SUP 2: 1.3795 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3727 Low Aug 29 and a bear trigger
- SUP 4: 1.3689 Low Jul 28
A bull cycle in USDCAD remains intact. Last Thursday’s rally confirmed a recent bull flag on the daily chart and a resumption of the current uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111 next, the Apr 10 high, and further out scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support is at 1.3856, the 50-day EMA.
AUDUSD TECHS: Bearish Threat
- RES 4: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6660/6707 High Sep 18 / 17 and a bull trigger
- RES 2: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
- RES 1: 0.6560 50-day EMA
- PRICE: 0.6513 @ 08:11 BST Oct 13
- SUP 1: 0.6473 Low Oct 10
- SUP 2: 0.6463 Low Aug 27
- SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
A sharp sell-off in AUDUSD on Friday resulted in a break of 0.6521, the Sep 26 low, and 0.6484, the 76.4% retracement of the Aug 21 - Sep 17 bull leg. This undermines the recent bullish theme and instead signals scope for a deeper retracement, potentially towards key support at 0.6415, the Aug 21 and 22 low. Initial resistance to watch is 0.6560, the 50-day EMA. Key short-term resistance has been defined at 0.6629, the Sep 30 and Oct 1 high.
US TSYS: Tsys Rebound Late, 2s-10s Leading on Subdued Holiday Trade
- Treasury look to settle mixed, bonds weaker on very light volumes (TYZ5 670k) due to the Columbus Day holiday. The Dec'25 10Y contract currently trades at 113-05.5 (+1) - rebounding late with no obvious headline of Block-driven support.
- Normal Globex trade hours, stocks open - recovering approximately half of Friday's rout: the DJIA trades up 575.86 points (1.27%) at 46,057.31, S&P E-Minis up 98 points (1.49%) at 6,693, Nasdaq up 467.7 points (2.1%) at 22,674.98.
- No data, but Philly Fed Pres Anna Paulson (non-2025 FOMC voter, votes in 2026) said in a speech Monday that with rates "modestly restrictive now", she sees easing through year-end in line with the September SEP median - in other words, two more cuts by year-end. That's in line with MNI's assumption of her view.
- More Fed speakers tomorrow with focus on Chairman Powell's economic outlook keynote address at the NABE Annual Meeting at 1220ET.
