EM LATAM CREDIT: Chile: New Finance Minister - Negative
(CHILE; A2/A/A-)
Nicolas Grau was appointed the new finance minister of Chile, replacing Mario Marcel who resigned for personal reasons. Boric forced the resignation of the agriculture minister recently.
There was also an education bill that involved debt forgiveness and possibly other proposals less palatable to Marcel. Boric is nearing the end of his term so he may be thinking about his legacy as well as supporting the Left in the upcoming election.
Marcel was generally well liked and respected across both sides of the aisle and by the markets, Grau not so much.
A long time ally of President Boric who was previously the economy minister, Grau will likely be more supportive of Boric's spending policies as the president seeks to push his agenda prior to leaving office.
CHILE 2036s were last quoted T+78bp, 16bp tighter QTD and 21bp tighter YTD. We doubt this news has much of an impact on hard currency bonds but may continue to impact local rates and fx markets.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
TARIFFS: Highlights Of Bessent's Bloomberg TV Interview
Tariff-related excerpts from Bessent's Bloomberg interview.
On Japan
- Bessent: Japan got the 15% [tariff] rate because they were willing to provide this innovative financing mechanism.
- This is all new capital. It's going to be targeted at strategic industries.
On EU
- Bloomberg TV: Can anyone get below 15%? Is this the new floor? Is the EU still trying for a 10% baseline?
- Bessent: Repeats result of innovative package. Brussel’s hasn’t come up with anything innovate yet. Talks are going better than they had been. I think we are making good progress. Repeats previous line about collective action problem in EU.
On China
- Bessent: We are in a good place with China now. There is the potential for a big beautiful rebalancing between the US and China. […] We believe they should become more of a consumption economy. If they are willing to do down that route we could do it together.
- Bloomberg TV: You told me last week the market does not need to worry about Aug 12. That’s the deadline for this current detente between Washington and Beijing. What’s the new deal?
- Bessent: Again, I think we could roll it forward, maybe on a 90 day increment. The goods news here is that we are back on track with negotiations. I think we can get into a very good cadence of regular meetings.
- A Trump-Xi meeting wouldn't be before Labor Day.
TARIFFS: US' Bessent: EU Threats On Retaliatory Tariffs A Negotiating Tactic
- On talks with China, Bessent repeats comments from yesterday saying talks are on a good place, and that they can move on to bigger talks. Mentions Chinese purchase of Iranian and Russian oil again. Says that there is no specific date set for President Donald Trump's visit to China.
- Regarding the deal announced with Japan, and whether the EU could get a similar deal, Bessent says Japan "got 15% due to an innovative financing mechanism."
SOFR OPTIONS: BLOCK: Aug'25 SOFR Puts
- 50,000 SFRQ5 95.62 puts, cab (0.25) at 0652-0656ET (open interest at 39,810 coming into the session).
