PERU: Congress Approves New Pension Fund Withdrawal
Sep-18 12:22
- Last night, Congress passed a new pension withdrawal bill that will allow workers to withdraw up to $7.5bn from private pension funds. Bloomberg reports that the measure passed with more than 110 votes out of 130 and would allow workers to receive up to $6,160 each.
- This is the country’s eighth pension withdrawal in recent years, and it comes after the government backtracked on previous resistance to the plan over the weekend, after protests earlier this month.
- Analysts say that the AFPs may have to reduce holdings of Peru sovereign bonds to raise cash to meet the withdrawals. However, BBVA notes that the AFP’s have low holding of local bonds, so they believe that they could choose to unload a larger share of external assets than previously to raise cash. In their view, although withdrawals will be negative in terms of fundamentals for the longer run, the foreign asset selling and conversion to PEN would benefit the sol in the near term, unless the BCRP steps in.
- USDPEN closed marginally lower yesterday at 3.4760, just above recent five-year lows.
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CANADA: Core Pressures Eyed In July CPI
Aug-19 12:10
Reminder - July's CPI report (0830ET) is expected to show steady core inflationary pressures on a Y/Y basis but a continued deceleration in headline on a Y/Y basis.
- Current BOC pricing sees roughly 30% implied probability of a September cut, with the first (and only remaining) full 25bp reduction seen only by about March next year. Today's won't be the deciding data in the September BOC decision - it's the first of two CPIs before Sep 17 (and of course we get another jobs report after July's poor numbers, and GDP before then too).
- MNI's median of sell-side analysts sees the average of the trim/median core measures at 3.075%, effectively reflecting an upside bias vs June's 3.05%. See table below.
- However, headline CPI is seen remaining below 2% (1.8% with a slight downside unrounded bias, vs 1.86% prior, all Bloomberg consensus). The M/M headline measure is seen at 0.3-0.4% M/M (vs 0.1% prior; not seasonally adjusted).
STIR: Repo Reference Rates
Aug-19 12:07
- Secured Overnight Financing Rate (SOFR): 4.34% (-0.02), volume: $2.810T
- Broad General Collateral Rate (BGCR): 4.33% (-0.01), volume: $1.159T
- Tri-Party General Collateral Rate (TCR): 4.33% (-0.01), volume: $1.134T
- (rate, volume levels reflect prior session)
US TSY FUTURES: September'25-December'25 Roll Update
Aug-19 12:03
The latest Tsy quarterly futures roll volumes from September'25 to December'25 below. Percentage complete is running 5% or lower across the curve ahead the "First Notice" date on August 29. Current roll details:
- TUU5/TUZ5 appr 12,300 from -8.12 to -8.0, -8.12 last; 3% complete
- FVU5/FVZ5 appr 37,400 from -4.75 to -4.25, -4.5 last; 6% complete
- TYU5/TYZ5 appr 30,600 from -0.25 to +0.25, +0.0 last; 5% complete
- UXYU5/UXYZ5 under 1,000 from 0.75, .75 last; 2% complete
- USU5/USZ5 appr 2,000 from 13.25 to 13.5, 13.5 last; 3% complete
- WNU5/WNZ5 appr 1,600 from 8.25 to 8.5, 8.25 last; 2% complete
- Reminder, Sep futures don't expire until next month: 10s, 30s and Ultras on September 22, 2s and 5s on September 30. Meanwhile, Sep'25 Tsy options will expire this Friday, August 22.
