EM LATAM CREDIT: LATAM Credit Market Wrap

Oil rallied on Tuesday as the impact on global supplies from sanctions on Russia came to the fore again after US President Trump said that a US-India trade deal was close. Also, demand for products remains robust, as seen in US inventory data, and the announcement of restrictions on Russia’s Rosneft and Lukoil drove prices sharply higher. Short-covering also supported oil benchmarks on Tuesday.

• WTI rose 1.5% to $61.04/bbl after reaching $61.28, below initial resistance at $62.59, 24 October high. It fell to $59.66 but has struggled to hold moves below $60, which provided support to the benchmark from a technical perspective. Support lies at $58.83, 6 November low.
• Brent was up 1.7% to $65.13/bbl after a peak of $65.31 to be slightly higher in November. It approached resistance at $65.98, 9 October high. Initial support is a $62.84, 6 November low.
• With product prices surging, attention will be on Wednesday’s US industry inventory data. The official EIA release will be Thursday.
• India is the second largest importer of Russian oil and if it looks to other sources there could be a large quantity of Russian crude unconsumed.
• The excess oil supply driven by increased OPEC and non-OPEC output remains in focus with the spread between the WTI December-January contracts only 6c. The EIA short-term outlook, IEA annual report and OPEC monthly report are published Wednesday. 

The overnight range was 153.67 - 154.44, Asia is currently trading around 154.10. The pair failed again back toward the 154.50 area as the USD got sold off in response to a weaker ADP print. The return of a positive sentiment in risk has brought the focus in USD/JPY back to the 154-155 resistance area. A sustained break above here is needed to potentially see the uptrend regain upward momentum, through here the focus would then turn toward the 160 area where I would start to become wary of intervention risks. On the day it looks to be a 153.60-154.50 range, look for dips back toward 152.00 and then the more important 149.00-150.00 area to be supported.

• MNI BRIEF: Japan Oct Sentiment Posts 6th Straight Rise. Japan’s Economy Watchers sentiment index rose for a sixth consecutive month in October, prompting the government to upgrade its assessment from the previous month. The stronger data helped ease some Bank of Japan concerns that private consumption may lose momentum as households struggle with high living costs, though the survey does not directly measure consumption.
• MNI INTERVIEW: Fed's Risk Management Cuts Not Enough - Revelio. The U.S. labor market will continue to soften and the Federal Reserve's 50 basis points of interest rate easing so far this year will not be enough to shore up hiring, private data provider Revelio Labs’ chief economist Lisa Simon told MNI.
• Options : Close significant option expiries for NY cut, based on DTCC data: 152.00($668m). Upcoming Close Strikes : none - BBG.
• Data/Event : Money Stock M2, Machine Tool Orders  

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Bank of Korea to Sell KRW700 bn 1-Year Bonds
• Hong Kong to Sell HK$1.5 Bn 1-year Bonds
• Vietnam To Sell VND 1.5Tln 2040 Bonds; (TD2540037)
• Vietnam To Sell VND 3.0Tln 2030 Bonds; (TD2530010)
• Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
• Vietnam To Sell VND 8.0Tln 2035 Bonds; (TD2535022)
• Thailand to Sell THB30 Bn of 2030 Bonds
• Bank Indonesia to Sell 96D SUVBI Bills
• Bank Indonesia to Sell 367D SUVBI Bills
• Bank Indonesia to Sell 185D SUVBI Bills
• Bank Indonesia to Sell 31D SUVBI Bills
• Bank Indonesia to Sell 273D SUVBI Bills
• China to Sell CNY55 Bn 91-Day Bills
• India to Sell INR60 Bn 182-Day Bills
• India to Sell INR70 Bn 91-Day Bills
• India to Sell INR60 Bn  364-Day Bills