EM LATAM CREDIT: Codelco: 2Q 2025 Earnings - Neutral
Aug-22 18:48
(CDEL; Baa2/BBB+/BBB+)
The accident at El Teniente was estimated to have already cost the company USD300mn and 33,000 tons of output. Despite that, production rose 9.3% Y/Y.
We posted about the accident a few days ago:
https://mni.marketnews.com/4oFtAKG
Profit dropped 59% Y/Y as a result of the impact of the exchange rate on peso-denominated liabilities, according to Codelco, though that loss didn't affect cash flow. EBITDA dropped 4.6% YoY.
CDEL 36s were last quoted T+147bp, 13bp tighter QTD and 15bp tighter YTD.
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COMMODITIES: Gold Falls As Trade Tensions Ease, Crude Edges Down, Copper Rallies
Jul-23 18:45
- Spot gold has fallen by 1.1% to $3,394/oz on Wednesday, as trade concerns eased with the US announcing a trade deal with Japan and progress on talks with the EU.
- The EU and US are closing in on a trade deal that would impose 15% tariffs on European imports, the FT wrote.
- A bull cycle in gold that started June 30 remains intact, however, with the yellow metal still 1.3% higher on the week. A continuation higher would open $3,451.3, the June 16 high.
- Initial firm support to watch is $3,282.8, the July 9 low.
- Meanwhile, crude has been steady today, with WTI Sep 25 broadly unchanged at $65.3/bbl.
- A bearish theme in WTI futures remains intact, with the sharp reversal from the June 23 high continuing to highlight scope for an extension lower. Support to watch is the 50-day EMA, at $64.70. This average has been pierced, and a clear break of it would expose $58.17, the May 30 low.
- Initial resistance to monitor is $69.41, the 50.0% retracement of the Jun 23 - 24 high-low range.
- Elsewhere, copper has rallied by a further 1.9% to $583/lb, taking gains this week to 4%, amid ongoing uncertainty about the potential 50% copper tariff.
- Copper futures remain bullish, with price briefly piercing the July 8 high at $589.55 earlier today. Above here, sights are on the $600.0 handle.
ECB: Morgan Stanley See ECB Cutting Quarterly After July Pause
Jul-23 18:41
- Morgan Stanley expect the ECB to keep rates on hold tomorrow, a long held view. “The rate normalization phase is over and any cut from here would need to clear a higher bar than before.”
- “The most immediate consequence is likely a shift around the timing of future changes to the monetary policy stance. Barring major shocks or data surprises, we see the ECB only changing rates at quarterly projections meetings." They see two more cuts this year, in September and December.
- “The ECB's June projections see solid growth in 2026-27. Headline inflation is moving back to target in 2027 after a temporary undershoot in 2026. Recent data prints show core inflation a touch lower in 2Q25 than the ECB forecast. And the appreciation of the euro is a downside risk for headline up to 2027.”
- “We still think the probability of further easing is underpriced by the market and we hold bullish duration structures. The uncertainty around the September meeting is the highest we have seen in a very long time: we construct an ECB uncertainty index and analyse the relationship that market uncertainty has with surprises at the next but one meeting.”
- They do however caution that they suspect Sintra comments have seen investors "overestimate the amount of ECB pushback to EUR strength we'll see". They note that "EUR/USD is in a tactical correction lower to 1.15 but we expect it to rebound further, aided by investor disappointment at the lack of pushback at this meeting – and perhaps even the September one.”
SOFR OPTIONS: BLOCK: Mar'26/Short Mar'26 SOFR Call Spread Steepener
Jul-23 18:32
- 5,000 SFRH6/0QH6 98.00 call spd, 2.0 net, short March bought over at 1421:45ET
