HYBRIDS: Iberdrola: NC26 Hybrid Thoughts
XS2244941063 IBESM 1.874 NC26 €1.6bn is callable Jan-Apr 2026
• The last 2 IBESM perps to be refinanced were done 78 and 73 days before the outstanding was called.
• IBESM 1.875 NC23 was refinanced 120 days earlier.
• Given the low coupon on the bond, a call in April is most likely.
• May 23, Mar 24, Feb 25 Perps were all pushed close to the First Reset date.
• Likely to be refinanced from second week of Jan 26 onwards.
(IBESM; Sub Baa3/BBB-/BBB)
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US DATA: Travel Categories, Medical Services Largely Responsible For Core Uptick
As usual, core services contributed the majority of overall core CPI in July, worth around 0.28pp of the 0.32% M/M reading. That's up from 0.19pp in June (on a core CPI reading of 0.23% M/M).
- As seen in the table below, the increased services inflation pressure vs June's report was almost entirely due to airfares (0.05pp more of a contribution), lodging (0.03pp more, albeit still contributing negatively), and medical services (0.02pp more). The key housing categories had a relatively flat contribution vs June.
- Core goods once again contributed 0.05pp, though the composition was different this month: used and new vehicles contributed slightly positively (after subtracting 0.04pp in June), with all other core goods seeing their contribution fall to 0.04pp from 0.09pp prior.
US-CHINA: China Orders Companies To Halt NVIDIA Chip Orders
"*CHINA ORDERS COMPANIES TO HALT NVIDIA CHIP ORDERS: INFORMATION" Bloomberg
"*CHINA ORDER APPLIES TO BYTEDANCE, ALIBABA, OTHERS: INFORMATION" Bloomberg
US: State Department Human Rights Report To Ramp Up Pressure On Brazil
The Washington Post reports that the Trump administration will “significantly escalate” criticism of Brazil and South Africa in the State Department’s annual human rights reports, scheduled to be transmitted to the US Congress today.
- According to a memo seen by The Post, the reports are expected to target the South African government for its alleged mistreatment of White Afrikaner farmers and the Brazilian government for its alleged persecution of former president Jair Bolsonaro.
- The Brazil report could further damage the prospect of a trade agreement with the US. The Post notes that the draft report specifically flags Brazilian Supreme Court Justice Alexandre de Moraes' social media directives, which the Trump administration claims targeted Bolsonaro supporters, and were a primary justification for hitting Brazil with the highest tariff rate of 50%.
- The Financial Times notes: "Trump has shown in the past a capacity to swiftly change tack, so no dispute with his administration is ever intractable. But the stand-off between the US and Brazil will not be easy to resolve — and could easily escalate."
- Indeed, Brazilian President Luiz Inácio Lula da Silva appears to have opted for closer ties with allies in the BRICS bloc over addressing Washington's concerns with Bolsonaro's treatment and trial.
- Rubens Ricupero, a former ambassador to Washington, said: “Everything seems to suggest that Bolsonaro will be found guilty. So you have to assume that a very tense situation between Brazil and the United States is going to deteriorate further.”
