EM LATAM CREDIT: Gran Tierra Debt Exchange

The early NY downtick in Tsys helps take both Bund and gilt futures to fresh session lows before stabilisation/modest recovery in recent trade.

• Moves are flow-centric, with no fresh headline catalysts noted.
• Initial support levels for Bund (127.31) and gilt (90.50) futures remain unchallenged/some distance away.
• German curve bear steepens, UK gilt yields little changed.
• Macro headline flow remains light, with little outside of the ongoing Ukraine-Russia ceasefire debate to note.
• FOMC meeting minutes eyed later today.

• In the FI space, despite recent gains Bund futures remain in a clear downtrend and the latest move higher appears corrective. Recent weakness confirmed a resumption of the downtrend, signalling scope for a move towards 126.53, the Mar 11 low (cont.). Initial firm resistance is seen at 127.86, the 20-day EMA. A break of this average would signal the start of a stronger correction. The bear trigger is 126.75, the Dec 22 low.
• Recent price action in Gilt futures highlights 90.50, the Dec 16 low, and 91.93, the Nov 27 high, as two important short-term directional triggers. A clear breach of support at 90.50 would signal scope for a deeper retracement towards 89.86, the Nov 19 low and a bear trigger. For bulls, a stronger resumption of gains and a breach of 91.93, would instead signal scope for a climb towards resistance at 92.55, the Nov 11 high.

• Secured Overnight Financing Rate (SOFR): 3.77% (+0.01), volume: $3.346T
• Broad General Collateral Rate (BGCR): 3.75% (+0.01), volume: $1.325T
• Tri-Party General Collateral Rate (TCR): 3.75% (+0.01), volume: $1.293T
• (rate, volume levels reflect prior session)