EM CEEMEA CREDIT: MNI EM Credit Market Wrap - CEEMEA (04 Feb)
MNI EM Credit Market Wrap - CEEMEA (04 Feb)
Source: BBG
Measure Level Δ DoD
5yr UST 4.33% -3bp
10yr UST 4.53% -3bp
5s-10s UST 19.62 +0bp
WTI Crude 72.5 -0.6
Gold 2838 +23.3
Bonds* Z-Sprd Δ DoD
REPHUN 5 1/2 03/26/36 207bp +7bp
POLAND 5 1/8 09/18/34 137bp +4bp
ROMANI 5 3/4 03/24/35 317bp +3bp
TURKEY 6 1/2 01/03/35 318bp -3bp
KAZAKS 4.714 04/09/35 120bp +1bp
UZBEK 6.9 02/28/32 312bp +0bp
KSA 5 5/8 01/13/35 142bp +3bp
ADGB 5 04/30/34 90bp +2bp
QATAR 4 3/4 05/29/34 75bp +0bp
BHRAIN 7 1/2 02/12/36 288bp +1bp
SOAF 7.1 11/19/36 333bp +2bp
NGERIA 10 3/8 12/09/34 568bp -3bp
GHANA 5 07/03/35 705bp -9bp
BENIN 8 3/8 01/23/41 469bp +0bp
EGYPT 7.3 09/30/33 559bp -10bp
- Source: CBBT, BGN for GH and BN
FX Level Δ DoD
USDZAR 18.65 -0.10
USDTRY 35.94 -0.02
EURHUF 407.0 -1.50
EURPLN 4.22 -0.01
EURCZK 25.16 -0.06
** The main stories out of the regions **
That tightening bias seen during ASIA hours felt more mixed for CEEMEA. U.S. Treasuries are showing 10Y @ 4.53%, -3bp, with 5s/10s unch @ 19.62. Benchmark CEE sovereign bonds are charting marginally wider in z-spread, eg REPHUN 36s +7bp, POLAND 34s +4bp. Israel’s sovereign paper is also ending the day some 10-20bp wider in z-spread. Conversely, sovereign Egypt, Angola and Ukraine are ending the session tighter across the term structure with select maturities 10-30bp inside vs previous CoB. Primary saw issuers mandating banks, with Saudi Arabian Mining (Ma’aden) indicating plans for a USD dual tranche Sukuk, 5Y & 10Y tenors potentially. We looked at the issuer’s credit profile, sketching a note with fair value estimates looking at both country and industry peers. Elsewhere, we highlighted newsflow on Tullow Oil (new interim CEO, TLWN 26s charting some 30cents lower on the day), Hungarian MVM’s first-time rating by Moody’s and South Africa’s Vodacom posting Q325 revenues update. Among bond movers, RWANDA 5.5 31s is charting 10bp wider on the day as uncertainty remains elevated in the neighbouring DRC eastern region.
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Historical bullets
JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
