EM CEEMEA CREDIT: MNI EM Credit Market Wrap - CEEMEA
MNI EM Credit Market Wrap - CEEMEA
Measure Level Δ DoD
5yr UST 4.59% +1.8bp
10yr UST 4.77% +1.5bp
5s-10s UST 18.03 -0.3bp
CDX EM 97.0 -0.1bp
CDX EM IG 100.7 -0.0bp
CDX EM HY 92.9 -0.1bp
WTI Crude 77.9 +1.3
Gold 2671 -18.5
USDZAR 19.10 -0.01
USDTRY 35.49 +0.06
EURHUF 413.4 +0.12
EURPLN 4.27 +0.01
EURCZK 25.20 +0.13
** The main stories out of the region **
Primary market window is open attracting various USD mandates, with GCC financials as well as various supranationals and corporates in Africa.
We see recent IPTs still compressed, allowing for paper to get priced at or close to FVs whilst demand remains robust.
Following ASIA's close showing marginal spread weakness, with sovereign PHILIP 35s some 2bp wider on the day, we have seen a continuation of Friday's spread pressure post US#s in CEEMEA with EGYPT and ROMANI bonds+20bp. High quality paper looks well supported though, eg KSA 35s charts only 4bp wider on the day.
Across GCC, whilst QNBK posted solid FY24 results, focus was on primary mandates for BSFR, ABCBI, RJHIAB. Elsewhere, Aldar announced a AED9bn RCF, PIF completed RE acquisition and BEXBAH tendered its '27s. The proposed unit deal talks between Maaden and Alba have reached an end.
In CEE, Turkish TCELLT announced a mandate for 5Y and Sust7Y deals.
In Africa, we saw supra AFRFIN new hybrid deal in the market, as well as USD mandates for miner Ivanhoe and oil&gas Azule Energy.
Top/Bottom Performers recap:
Among top performers on the day, OPTHB '33s @ z+266bp closed 13bp tighter. EGYPT and ROMANI sovereign paper charting 20bp wider.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
