EM LATAM CREDIT: LATAM Credit Market Wrap
Source: Bloomberg Finance L.P.
Measure Level Δ DoD
5yr UST 3.66% -1bp
10yr UST 4.09% 0bp
5s-10s UST 42.8 +1bp
WTI Crude 58.7 -0.7
Gold 4211 -21.5
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 819bp N/A
BRAZIL 6 1/8 03/15/34 230bp -3bp
BRAZIL 7 1/8 05/13/54 315bp -1bp
COLOM 8 11/14/35 326bp -2bp
COLOM 8 3/8 11/07/54 381bp -5bp
ELSALV 7.65 06/15/35 363bp +3bp
MEX 6 7/8 05/13/37 218bp -2bp
MEX 7 3/8 05/13/55 265bp -1bp
CHILE 5.65 01/13/37 120bp -1bp
PANAMA 6.4 02/14/35 212bp -6bp
CSNABZ 5 7/8 04/08/32 758bp -41bp
MRFGBZ 3.95 01/29/31 274bp -3bp
PEMEX 7.69 01/23/50 478bp -7bp
CDEL 6.33 01/13/35 181bp +0bp
SUZANO 3 1/8 01/15/32 172bp +1bp
FX Level Δ DoD
USDBRL 5.33 -0.03
USDCLP 922.65 -7.15
USDMXN 18.3 -0.02
USDCOP 3814.80 +0.04
USDPEN 3.37 -0.01
CDS Level Δ DoD
Mexico 94 (2)
Brazil 140 (2)
Colombia 203 0
Chile 46 (1)
CDX EM 98.52 0.07
CDX EM IG 101.44 0.06
CDX EM HY 95.08 0.08
Main stories recap:
· Major U.S. equity indexes rebounded from yesterday’s sell off while Treasuries were mostly unchanged.
· The EM primary market went quiet with only one USD150mn CEEMEA issue while in LATAM there were two mandates pending for Argentina entities and a benchmark-sized two-tranche registered deal in the queue for LATAM electronic retailer MercadoLibre.
· LATAM secondary market benchmark USD bond spread performance was mixed with sovereign bonds 2-4bp tighter while corporate bonds were mostly unchanged.
· Bonds of Brazil steel company CSN moved up 1-2 points, finally rebounding after a persistent sell off since mid-November. Raizen bonds went in the other direction with a lack of news about either asset sales or a capital injection driving bonds 2-3 points lower.
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ASIA: Government Bond Issuance Today
- Bank of Korea to Sell KRW1 tn 91-Day Bonds
- South Korea to Sell KRW2 tn 2-Year Bonds
- Thailand to Sell THB20 bn of 182-Days Bills
- Philippines To Sell PHP 7.5Bln 182D Bills (PH0000060386)
- Philippines To Sell PHP 7.0Bln 91D Bills (PH0000059909)
- Philippines To Sell PHP 7.5Bln 364D Bills (PH0000061343)
ASIA: Coming Up in Asia Today
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Indonesia PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global South Korea PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Malaysia PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Philippines PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Thailand PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Taiwan PMI Mfg |
| 0230GMT | 0930HKT | 1130AEDT | S&P Global Vietnam PMI Mfg |
| 0345GMT | 1045HKT | 1245AEDT | RatingDog China PMI Mfg |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia Imports YoY SEPTEMBER |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia Exports YoY SEPTEMBER |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia Trade Balance SEPTEMBER |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia CPI YoY OCTOBER |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia CPI Core YoY OCTOBER |
| 0600GMT | 1300HKT | 1500AEDT | Indonesia CPI NSA MoM OCTOBER |
| 0430GMT | 1400HKT | 1600AEDT | HSBC India PMI Mfg |
source: Bloomberg Finance LP / MNI
JPY: USD/JPY - Probing Resistance Around The 154-155 Area
The Friday night range was 153.89 - 154.41, Asia is currently trading around 154.10. The pair remains well supported thanks to a combination of a hawkish FED and a BOJ that is still unsure about when it will raise rates. We are approaching some resistance back toward the 154/155 area and I would expect we might to do some work around here initially. I also suspect any sustained break back above 155 could see the move begin to accelerate and with that the potential for further intervention, though personally I think they will wait for levels closer to 160 to get involved. Looks for dips to continue to be supported while above 149-150.
- MNI Policy: BOJ To Focus On Evolving Prices And Spending. The BOJ cautioned, that “prices have continued to rise, mainly led by food prices, which are daily necessities, and this has had a clear impact on households’ consumption activity.” The warning could undermine the BOJ’s baseline view that consumption will return to a moderate increasing trend as food price gains slow.
- Options : Close significant option expiries for NY cut, based on DTCC data: 151.50($385m), 152.50($401m). Upcoming Close Strikes : 155.00($1.63b Nov 6), 155.35($1.17b Nov 6) - BBG.
Fig 1 : USD/JPY Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
