EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (02 May)
Source: BBG
Measure Level Δ DoD
5yr UST 3.91% +11bp
10yr UST 4.31% +9bp
5s-10s UST 39.0 -2bp
WTI Crude 58.5 -0.7
Gold 3240 +1.0
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 877bp -11bp
BRAZIL 6 1/8 03/15/34 278bp +2bp
BRAZIL 7 1/8 05/13/54 376bp +1bp
COLOM 8 11/14/35 453bp -3bp
COLOM 8 3/8 11/07/54 541bp -1bp
ELSALV 7.65 06/15/35 474bp -7bp
MEX 6 7/8 05/13/37 294bp -4bp
MEX 7 3/8 05/13/55 361bp -3bp
CHILE 5.65 01/13/37 161bp -4bp
PANAMA 6.4 02/14/35 345bp -4bp
CSNABZ 5 7/8 04/08/32 637bp -8bp
MRFGBZ 3.95 01/29/31 321bp -12bp
PEMEX 7.69 01/23/50 715bp +5bp
CDEL 6.33 01/13/35 210bp -7bp
SUZANO 3 1/8 01/15/32 225bp -3bp
FX Level Δ DoD
USDBRL 5.65 -0.02
USDCLP 948.30 +1.03
USDMXN 19.6 -0.02
USDCOP 4250.31 +24.71
USDPEN 3.65 -0.01
CDS Level Δ DoD
Mexico 141 (0)
Brazil 182 (1)
Colombia 271 (0)
Chile 70 (1)
CDX EM 95.67 0.18
CDX EM IG 100.30 0.12
CDX EM HY 91.02 0.25
Main stories recap:
· A better-than-expected U.S. labor report triggered a rally in stocks and a sell off in bonds as signs of economic weakness in “soft” survey data the past few months failed to show up in the “hard” economic data.
· Prior to the jobs report there was spread widening across EM Asia and CEEMEA but then after the data release direction switched to a tightening bias which we saw in LATAM as well given the favorable macro backdrop.
· Mexican government owned Pemex was the outlier as spreads widened about 5bps with oil prices failing to rally and also in the wake of yet another bad earnings report. Mexican REIT Fibra Uno was another underperformer after bond ratings were put on watch negative a few days ago.
· Brazil high yield corporate names and some high yield sovereigns like Argentina tightened 5-10 bps.
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Historical bullets
TARIFFS: White House Releases Full Reciprocal Tariffs Table
White House releases an image of the full reciprocal tariff table: again, Canada and Mexico not mentioned
US TSYS: BLOCK: Jun'25 10Y Buy
- +5,000 TYM5 111-28.5, buy through 111-27.5 post time offer at 1636:00ET, DV01 $316,000. The 10Y contract trades 112-00 last (+7.5)
TARIFFS: Trump Announces 10% Minimum Tariffs, 34% on China, 20% EU
Trump: "We will calculate the combined rate of all their tariffs, non monetary barriers and other forms of cheating. And because we are being very kind...we will charge them approximately half of what they are and have been charging us. So the tariffs will not be full reciprocal"
- Trump chart shows to charge 34% tariffs on China, 20% on EU, 24% of Japan, Vietnam 46%, UK 10%, Korea 25%, Thailand 36%, Switzerland 31%, Indonesia 32%, Malaysia 24%, Cambodia 49%, South Africa 30%
- Trump says there is a minimum baseline tariff of 10%. No mention about Canada or Mexico, potentially another announcement forthcoming.
- It's also unclear whether these tariffs are in addition to, or replacing, existing tariffs.
- See image below from White House feed:
