MEXICO: Gov't Reaffirms Security Co-Operation With US

• Date $MM Issuer (Priced *, Launch #)
• 08/04 $3.25B #Barclays $1.5B 4.25NC3.25 +83, $500M 4.25NC3.25 SOFR+108, $1.25B 21NC10 +110
• 08/04 $2B #FISERV $1B +5Y +87, $1B 10Y +107
• 08/04 $2B Level 3 Financing 8.5NC3 7%, upsized from $1.25B
• 08/04 $1.525B #Dominion Energy $825M 30.5NC5.25 6%, $700M 30.5NC10.25 6.2%
• 08/04 $1.5B #Quanta Services $500M Each: 3Y +65, +5Y +80, 10Y +93
• 08/04 $1.25B Level 3 Financing 8.5NC3
• 08/04 $1B #Altria $500M 5Y +85, $500M 10Y +112
• 08/04 $700M #Kentucky Utilities 30Y +105
• 08/04 $700M #Louisville Gas & Electric 30Y +105
• 08/04 $600M #CenterPoint Houston 10Y +80
• 08/04 $Benchmark KKR & Co. 10Y +93
• 08/04 $Benchmark Chub Holdings 10Y +70
• 08/04 $Benchmark Public Service of Colorado 10Y +97, 2055 Tap +102

A new AP-NORC survey has found that “Many Democrats see their political party as “weak” or “ineffective,”” while, “Republicans are more complimentary of their party, although a small but significant share describe the GOP as “greedy” or say it is generally “bad.””

• AP notes: “Overall, U.S. adults held a dim view of both parties, with about 4 in 10 using negative attributes, including words such as “dishonest” or “stupid.””
• The survey is likely to temper optimism that lukewarm approval of President Donald Trump's policies will presage a major swing towards Democrats at the 2026 midterm elections.
• While Gallup reported in a survey last week, "Americans’ party affiliation has flipped back toward the Democratic Party after the Republican Party held advantages for most of 2023 and 2024," the outlet noted "these changes in party preference are occurring at a time when the Democratic Party’s image is at an all-time low and slightly worse than that of the Republican Party."

Figure 1: “Percentage of Democrats who used words to describe the Democratic Party that were categorized as negative, positive, or another category”

Source: AP

• US front rates sit between levels seen initially after Friday’s weak payrolls report & ISM manufacturing and the dovish extremes touched overnight.
• Fed Funds futures cumulative cuts from 4.33% effective: 23.5bp Sep (vs 12bp pre-NFP), 41bp Oct, 61bp Dec (vs 35bp), 73bp Jan and 86bp Mar.
• The SOFR implied terminal yield of 3.025% (SFRH7) is unchanged on the day having on Friday closed at technically its lowest since late April. It eyes more than five cuts from current levels.
• Tomorrow sees ISM services headline the docket. Bloomberg consensus looks for a small increase to 51.5 from 50.8 in a second monthly improvement after the 49.9 in May was its lowest since Jun 2024.
• The S&P Global US services PMI was surprisingly firm in the July flash, rising from 52.9 to 55.2 for its highest since Dec, but it has seen some significant differences to ISM Services before. As of June, ISM services was 2.1pts lower than the S&P Global PMI although June 2024 saw ISM services undershoot by a huge 6.1pts.
• Its manufacturing counterpart was weaker than expected across the board, with prices paid pulling back from receive highs, new orders chalking up a sixth consecutive monthly firmly in contraction territory and the employment index at the lowest since mid-2020.
• Post-FOMC Fedspeak continues to be light. Bostic and Hammack on Friday both pushed a measured stance after payrolls. Bostic still only sees one cut this year whilst Hammack said the US labor market still appears healthy, though fresh jobs numbers released Friday constituted a “disappointing report to be sure.”
• Whilst it’s a few weeks away, Powell’s address at the Aug 21-23 Jackson Hole Symposium will be at back of mind.