EM LATAM CREDIT: Brazil Treasury Secretary Comments on Sovereign Credit Rating

• Total of 8,000 SOFR White packs (SFRM5-SFRH6) Blocked at +0.030, most likely swap related with spreads running tighter in the vicinity.

Some analyst expectations for Wednesday's Refunding guidance, and future coupon size increases,  below (note there are no analysts who expect coupon sizes to be upped at this meeting):

Deutsche

• Future coupon auction upsizing: Starts Q1 2026 (pushed back 1Q)
• Guidance: “We see roughly even odds between Treasury keeping the existing language and updating it.” Could replace “several” with “few/a  couple”, signalling that coupon increases are not in current baseline but could be necessary later in the year depending on the fiscal outlook, or (unlikely) dropping guidance altogether.

Goldman Sachs

• Future coupon auction upsizing: Starts Aug 2026 (pushed back from Feb 2026). “The combination of the market environment and medium-term uncertainty around funding needs make it hard to have strong conviction on the timing of when coupon auction sizes might rise.”
• Guidance:  Unlikely to “significantly change” guidance.

TD Securities

• Future coupon auction upsizing: Late 2026 (pushed back from November 2025 prior).
• Guidance: “Given debt ceiling dynamics, the tariff revenues, and a desire to bring longer-dated yields lower, we think Treasury will choose to leave guidance unchanged once again.”

Wells Fargo

• Future coupon auction upsizing: Announced Jan 2026.
• Guidance:  Lean toward unchanged, but “we will not be surprised if Treasury scraps this language. If the federal deficit widens by more than we expect in the quarters ahead, there is a chance Treasury could initiate the next wave of auction size increases at the October refunding. Scrapping the forward guidance language would preserve maximum flexibility.”

• Stocks are holding moderately higher late Tuesday with Pres Trump trade officials teasing out positive sounding trade negotiation sound bites. Currently, the DJIA trades up 345.02 points (0.86%) at 40575.44, S&P E-Minis up 37 points (0.67%) at 5590, Nasdaq up 115.2 points (0.7%) at 17482.71.
• A mix of IT, Materials, Real Estate and Pharmaceutical sectors led both gainers and losers on the day.
• Tech stocks included Zebra Technologies +7.19%, SBA Communications +6.65%, Honeywell International +5.30%, Cadence Design Systems +5.13%. Elsewhere, Sherwin-Williams +5.66%,  American Tower +4.76%, A O Smith +4.40% and Labcorp Holdings +4.36%.
• Conversely, Regeneron Pharmaceuticals led laggers -7.40% on the day, Brown & Brown -6.03%, NXP Semiconductors -5.81%, Alexandria Real Estate -5.17%, Insulet -3.66%, UnitedHealth Group -2.24% and Super Micro Computer -2.07%.
• Latest earnings expected after the close: Booking Holdings, Mondelez International, Caesars Entertainment, Seagate, Starbucks, Frontier Communications, Expand Energy, Fair Isaac, Visa, BXP, PPG, Edison Int, ONEOK, First Solar, CoStar Group and Snap Inc.