EM LATAM CREDIT: Colombia: Tax Revenue Estimate Lowered - Neutral
(COLOM; Baa3/BBneg/BB+neg)
Colombia Finance Minister German Avila told congressmen that the government was willing to cut the 2026 budget by COP10Tn (USD2.57bn) since it reduced its estimate for tax revenues by COP10Tn.
Tax revenues have consistently missed government expectations in the past and have been partially responsible for the larger than 7% fiscal deficit facing the country.
At least now it seems there is some rationality about cutting spending with a lower revenue estimate. Recently the government proposed a tax reform bill that aimed to raise COP26Tn according to Reuters.
The tax proposal was directed at the wealthy with tax on dividends to non-residents, a corporate income tax surcharge, capital gains tax and an increase in the VAT tax.
COLOM 8% 2035 were last quoted T+260bp, 106bp tighter since June 30th and 72bp tighter YTD.
COLOM priced EUR4.1bn yesterday. The 3-year priced at 3.75% and was quoted today 3.71% while the 7 year came at 5.125% and was quoted at 5.07%. The 10-year underperformed, priced at 5.75% and was quoted 5.76%.
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US FISCAL YEAR-TO-DATE DEFICIT $1.629T, +7% VS FYTD 2024
- US FISCAL YEAR-TO-DATE DEFICIT $1.629T, +7% VS FYTD 2024
MNI: US JUL TREASURY BUDGET -$291.1B
- MNI: US JUL TREASURY BUDGET -$291.1B
EURGBP TECHS: Returns Lower, But Support Out of Reach
- RES 4: 0.8835 High May 3 2023
- RES 3: 0.8800 Round number resistance
- RES 2: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
- RES 1: 0.8735/8769 High Aug 3 / High Jul 27 and the bull trigger
- PRICE: 0.8643 @ 16:00 BST Aug 12
- SUP 1: 0.8612 50-day EMA
- SUP 2: 0.8611 Low Jul 31
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8508 Low Jun 27
EUR/GBP corrected lower last Thursday on the BoE rate decision, which sent prices through the weekly low. Despite the intraday weakness, support to watch remains out of reach for now at the 0.8612 50-day EMA. A clear break of it would strengthen a bear threat. More broadly, the trend set-up is bullish. Moving average studies remain in a bull-mode position highlighting a clear uptrend. Key resistance and the bull trigger is at 0.8769, the Jul 27 high.
