EM LATAM CREDIT: Grupo Aval: 2Q 2025 Earnings - Positive

• A phase of selling pressure tilts GBP to new pullback lows, pressuring GBP/USD to 1.3447 on generally very light volumes. No specific newsflow or headlines behind the move. The Times reported that Chancellor Reeves is "poised to force firms to pay more into staff pensions" - a concept that, while not new, would add to pressure on smaller firms already pressured by the increase in employers' NICs in last year's budget, adding to the downside risk to the UK jobs market this year.
• Consequently, EUR/GBP has broken and cleared above the early July high - putting the cross at the best levels since early April and narrowing the gap with 0.8738 in the process. The bull trigger above remains 0.8738, the 2025 high and near-term upside target.
• BoE's Bailey flagged the MPC's potential responsiveness to further jobs declines in his interview with The Times earlier: "The Bank of England is ready to make larger cuts to interest rates if the jobs market shows signs of a pronounced slowdown", adding that there was “consistent” evidence of businesses “adjusting employment” after Rachel Reeves increased employers’ national insurance contributions (NICs).

SFIZ5 96.80/97.00 call spread, bought for 1.5 in 23.075k

• Seven leg put skew package, 3.5 net package:
  • +8,000 SFRQ5 95.81/95.93/96.00 broken put trees w/
  • +8,000 SFRV5 96.25/96.31 put spds vs.
  • -8,000 SFRV5 96.50/96.75 call spds
• Just prior:
• +5,000 SFRZ5 95.56/95.62/95.68 put trees, ref 96.14/0.05