EM LATAM CREDIT: Milei's Party Still Favourites, But Odds Declining

The Swedish Government updated economic forecasts here

• "Sweden’s economic recovery began in late 2024 but was interrupted in early 2025 when the US administration announced high tariffs against the EU and the rest of the world"..."The tariff agreements signed over the past few months are expected to reduce the risk of an escalated trade conflict, which is positive for growth both in Sweden and among its neighbours. Swedish households have begun to show optimism after a period of low expectations. Going forward, increased domestic demand is seen as particularly vital for Sweden’s recovery."
• "The prospects for recovery are good. From the second half of 2025, real wage growth, lower interest expenditure and an accommodative fiscal policy are expected to contribute to steady growth in household consumption"
• "Overall, growth is expected to be higher next year, and in 2027 the Swedish economy is predicted to be essentially in balance. "
• "The labour market recovery is expected to be slightly delayed, and employment is forecast to rise at a faster rate in 2026."

• Treasuries pared gains after drop in MBA Mortgage apps from prior - albeit on light volumes (TYU5 under 200k).
• Tsy Sep 10Y contract slipped to 111-24.5 from 111-26, 10Y yield tapped 4.2990% before slipping back to 4.2965%.
• Curves remain flatter: 2s10s -1.178 at 54.432, 5s30s -.896 at 107.346.

The EU has announced it will be looking to sell the following at its auction next Monday, August 25:

• Up to E2.5bln of the 2.875% Dec-27 EU-bond (ISIN: EU000A3K4EW6)
• Up to E2.0bln of the 3.375% Dec-35 EU-bond (ISIN: EU000A4D8KD2)
• Up to E1.5bln of the 3.375% Oct-38 EU-bond (ISIN: EU000A3K4D74)