BRAZIL: BRL Outperforms Ahead Of US Talks, BCB’s David Reiterates Hawkish Stance
Oct-15 15:57
- Continuing to monitor remarks from BCB monetary policy director Nilton David who is speaking at an EM conference where he is reiterating the central bank’s hawkish rhetoric. Consistent with recent messaging, David says that inflation expectations are higher than the central bank would like them to be and that they need to take time to be sure about their decisions.
- David reiterates that he believes the current interest rate is sufficient to bring inflation back to target, but that it would need a prolonged pause to get there.
- Separately, President Lula has confirmed that Brazil and the US will hold negotiation talks on tariffs tomorrow, according to a report on Reuters. The meeting between Foreign Minister Mauro Vieira and US State Secretary Marco Rubio was agreed last week.
- The Brazilian real continues to outperform today, although it did not react to the above headlines, holding onto gains of around 0.7% against the dollar. Meanwhile long-end DI swap rates have rallied 8-9bp, while local equities are up 0.7%, in line with major equity indices. For USDBRL, the move towards 5.44 narrows the gap to initial support at 5.3909, the 20-day EMA. Key support has been defined at 5.2697, the Aug 18 low.
- Besides the US trade talks tomorrow, attention also turns to August economic activity stats, which are expected to show a further slowdown in economic growth.
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ITALY AUCTION PREVIEW: Buyback Announced For Wednesday
Sep-15 15:47
MEF has announced a buyback transaction for Wednesday, September 17 via the Bank of Italy. A maximum of E5bln will be bought back.
The bonds subject to the buyback are:
- The 3.50% Jan-26 BTP (ISIN: IT0005514473)
- The 4.50% Mar-26 BTP (ISIN: IT0004644735)
- The 0% Apr-26 BTP (ISIN: IT0005437147)
- The 0.50% Apr-26 CCTeu (ISIN: IT0005428617)
- The 1.60% Jun-26 BTP (ISIN: IT0005170839)
- The 0% Aug-26 BTP (ISIN: IT0005454241)
"The Specialists in Government bonds will be allowed to submit up to five offers for each bond that MEF will buyback. Each offer shall be sent to the Bank of Italy by 11 a.m. of the auction day,"
US-CHINA: Chinese Negotiator Confirms TikTok 'Framework Agreement'
Sep-15 15:32
MNI London: China’s top trade negotiator, Li Chenggang, has described two days of meetings with US Treasury Secretary Scott Bessent and USTR Jamieson Greer on issues of ‘common concern’ as “in-depth, candid, and constructive.”
- Li said, per Reuters, that “both sides acknowledged stable trade ties is significant,” adding that while “frictions are normal”, it is “important to respect each other's core concerns.”
- Li confirms earlier comments from Bessent, saying a “framework agreement” has been reached regarding China’s divestment from the social media platform TikTok, a central focus of the talks.
- Li says, the sides will, “keep close communication, engage in consultation over detail of outcome documents.” Adds that the two sides will “jointly guide companies to have a good follow-up.” Li said China the TikTok agreement was "based on our assessment and judgement… the consensus is in mutual interests."
- The Wall Street Journal notes, “China, which had until now shown little appetite for a deal on the wildly popular app, likely conceded to the agreement to keep alive Beijing’s ambition for President Trump to visit China.”
- More sharply, Li claimed that the US “continued sanctions on Chinese entities” following previous rounds of talks. Alleges the US “generalise national security”, in a way that constitutes “unilateral bullying”.
- Li said China “will not sacrifice interests of firms in order to reach a deal,” adding that, “China firmly safeguards Chinese firms' legitimate rights and interests”. Li adds the US "expressed willingness to work with China in reducing investment barriers."
FED: US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 13.53%)
Sep-15 15:32
- US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 13.53%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 26.13% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 6.89% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 66.98% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 3.09
