EM LATAM CREDIT: Ecuador: U.S. Troops - Neutral
(ECUA; Caa3/B-/CCC+)
"Rubio Says US Is Open to Basing Troops in Ecuador as Ties Warm" - Bbg
U.S. Secretary of State Marco Rubio visited Ecuador as part of a visit to the Latin American region which first included a stopover in Mexico where he also discussed security issues with President Claudia Sheinbaum.
At a press conference with foreign minister Gabriela Sommerfeld he said the U.S. would consider basing troops in Ecuador if it was requested and used the phrase "ally in a very strategic part of the world" when referring to Ecuador.
Ecuador's President Daniel Noboa is in the process of amending the constitution to allow for foreign military bases on Ecuador's soil, according to Bloomberg.
Security has been one of the most important issues in the country, especially with all the drug and gang related violence, and President Noboa has made it clear Ecuador is supportive of battling what the Trump administration has termed narco-terrorists.
ECUA 35s were last quoted 76.88, up 3/4 point today, up 4 points since June 30th and up 20 points YTD.
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US DATA: July SLOOS Doesn’t Move The Needle
Released yesterday at 1400ET having been made available at last week’s FOMC meeting, the July Senior Loan Officer Opinion Survey (SLOOS) generally showed little change/a further tightening in lending standards in Q2 whilst loan demand was mixed. These are relatively small moves compared to those seen quarter-to-quarter during the pandemic and earlier in the post-pandemic period.
- For those lending to businesses in Q2, “survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Furthermore, banks generally reported tighter standards and weaker demand for commercial real estate (CRE) loans.”
- The tightening in C&I loans was most pronounced for large & medium firms as it accelerated further after a brief pause back in Q4. The 18.5% net tightening of standards was the largest since late 2023.
- For those lending to households, “banks reported basically unchanged lending standards and weaker demand for residential mortgage loans, on balance. In addition, banks reported tighter lending standards and stronger demand for home equity lines of credit (HELOCs). For consumer loans, standards tightened for credit card loans and remained basically unchanged for auto and other consumer loans. Meanwhile, demand weakened for credit card and other consumer loans and strengthened for auto loans.”
- Respondents for commercial & industrial loans saw some of the largest moves on the quarter:
SOFR OPTIONS: BLOCK: Dec'25 SOFR Puts
- 6,500 SFRZ5 95.68 puts, 0.75 ref 96.245 at 1408:46ET
LOOK AHEAD: Wednesday Data Calendar: 10Y Note Sale, Fed Speak
- US Data/Speaker Calendar (prior, estimate)
- 08/06 0700 MBA Mortgage Applications (-3.8%, --)
- 08/06 1130 US Tsy $65B 17W bill auction
- 08/06 1300 US Tsy $42B 10Y Note auction (91282CNT4)
- 08/06 1400 Fed Gov Cook & Boston Fed Collins panel event (no text, Q&A)
- 08/06 1610 SF Fed Daly moderated discussion eco-summit
- Source: Bloomberg Finance L.P. / MNI
