EM LATAM CREDIT: Brava Energia: Potential Petronas Field Acquisition - Positive
(RRRPBZ; NR/B+pos/BB-)
"Oil Juniors PRIO, Brava, BW Said to Eye Petronas Brazil Field" - Bbg
Early stages with only a confidentiality agreement signed as three independent oil and gas exploration companies consider the purchase of Malaysian national oil company Petronas' stake in a Brazil oil field that produced 35,000 b/d in July.
We would view the acquisition as positive if it came to fruition and if economic terms were favorable as it would increase the company's scale and production capability.
To put that in context, Brava Energia's latest production for August was about 92,000 boe/d so this would be a meaningful increase in scale for the Brazil oil and gas company. Already the company has had success this year in growing production meaningfully, reaping the benefits of expanding its offshore facilities last year.
RRRPBZ 31s were last quoted at a YTM of 8.12%, lower by 120bp from June 30th and down 76bp YTD.
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US TSYS/SUPPLY: Review 3Y Note Auction: Another Small Tail
- Treasury futures remain weaker, little react after $58B 3Y note auction (91282CNU1) tails yet again: drawing 3.669% high yield vs. 3.662% WI; 2.53x bid-to-cover vs. 2.51x prior.
- Peripheral stats see indirect take-up slips to 53.99% vs. 54.11% prior; direct bidder take-up 28.13% from 29.38% prior; primary dealer take-up rises to 17.88% vs. 16.51% prior.
- The next 3Y auction is tentatively scheduled for September 9.
FED: US TSY 3Y NOTE AUCTION: HIGH YLD 3.669%; ALLOTMENT 72.30%
- US TSY 3Y NOTE AUCTION: HIGH YLD 3.669%; ALLOTMENT 72.30%
- US TSY 3Y NOTE AUCTION: DEALERS TAKE 17.88% OF COMPETITIVES
- US TSY 3Y NOTE AUCTION: DIRECTS TAKE 28.13% OF COMPETITIVES
- US TSY 3Y NOTE AUCTION: INDIRECTS TAKE 53.99% OF COMPETITIVES
- US TSY 3Y AUCTION: BID/CVR 2.53
EURUSD TECHS: Corrective Cycle
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1617 20-day EMA
- PRICE: 1.1578 @ 16:43 BST Aug 5
- SUP 1: 1.1401 Low Jul 30 and a bear trigger
- SUP 2: 1.1373 Low Jun 10
- SUP 3: 1.1313 Low May 30
- SUP 4: 1.1184 38.2% retracement of the Feb 3 - Jul 1 bull cycle
Despite Friday's rally and a late recovery into the Tuesday close, EURUSD maintains a bearish tone. The recent breach of key support at the 50-day EMA, at 1.1548, highlights a stronger reversal and the start of a correction. This opens 1.1373 next, the Jun 10 low. Firm resistance is seen at 1.1617, the 20-day EMA, where a break is required to signal a reversal. This week’s price action highlights a key short-term support and bear trigger at 1.1401, Jul 30 low. A break would resume the downtrend.
