EM LATAM CREDIT: Ecopetrol S&P 'BB+' Rating Affirmed- Negative

Final March trade data confirmed a new record (nominal) deficit and the largest on a relative basis since 2005/06 in the imbalances ahead of the Great Financial Crisis. However, pharmaceutical tariff front-running and continued heavy imports of gold are greatly clouding interpretation of underlying trends. 

• The goods & services trade deficit was larger than expected in final March data, at $140.5bn (cons 137.2bn) after a slightly upward revised $123.2bn (initial $122.7bn) in Feb. It exceeds the $130.7bn in Jan.
• It came as the goods deficit confirmed a new record high of $163.5bn (larger again than the $162.0bn in the advance release) whilst the new data on the services surplus fell from $23.8bn in Feb to $23.0bn in Mar for the smallest surplus since Apr 2023.
• Of course, these are nominal figures whereas a better historical comparison is in % GDP terms. Here, and looking on a 3mth basis to smooth the data out, the goods deficit confirmed its widening to 6.2% GDP (last larger, and only just, in the 2005/06 imbalances before the GFC) whilst the services surplus held at 1.0% GDP as has broadly been the case since mid-2021.
• Pharmaceutical products, a point of contention for the Trump administration, were behind the 28% surge in consumer goods imports, attributing $20.9bn of the $22.5bn monthly increase.
• Specifically, pharma imports increased from $29.5bn to $50.4bn (71% M/M, and vs an average $20.5bn in 2024). That mostly tallied to a $15.5bn increase in imports from Ireland at $30.7bn – see the below chart for just how unprecedented this is in likely front-running ahead of previously touted pharmaceutical tariffs.
• Imports of monetary gold were off highs from Jan & Feb but still unsurprisingly had an outsized impact, with imports of finished metal shapes worth $21.3bn in March. That’s compared to $31.7bn in Feb and $34.2bn in Jan but an average of just $4bn in 2024. Comex inventories imply a significant moderation in this category in April. 

• RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 3: 1.3550 High Feb 24 ‘22 
• RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 1: 1.3444 High Apr 28 / 29 
• PRICE: 1.3363 @ 16:44 BST May 6
• SUP 1: 1.3257 Low May 5   
• SUP 2: 1.3232 20-day EMA
• SUP 3: 1.3041/3045 Low Apr 14 / 50-day EMA 
• SUP 4: 1.2968 Low Apr 11 

The latest pullback in GBPUSD appears corrective. A tweezer top formation on the daily candle chart last Monday/Tuesday, highlights a short-term top. Firm support at 1.3232, the 20-day EMA, remains intact. A break of this level would signal scope for a deeper retracement. Note that moving average studies are in a bull-mode position, signalling a dominant underlying uptrend. A resumption of gains would open 1.3510, a Fibonacci projection. 

• We have published and e-mailed to subscribers the MNI US Employment Insight.
• Please find the full report including MNI analysis: https://media.marketnews.com/US_Employment_Report_May2025_1306f78f63.pdf