EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (03 Feb)
Source: BBG
Measure Level Δ DoD
5yr UST 4.4% +2bp
10yr UST 4.5% -0bp
5s-10s UST 18.1 -3bp
WTI Crude 72.9 +0.4
Gold 2821 +22.9
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 4 1/8 07/09/35 700bp +8bp
BRAZIL 6 1/8 03/15/34 261bp -5bp
BRAZIL 7 1/8 05/13/54 353bp -1bp
COLOM 8 11/14/35 372bp -3bp
COLOM 8 3/8 11/07/54 456bp +1bp
ELSALV 7.65 06/15/35 401bp -1bp
MEX 6 7/8 05/13/37 264bp -4bp
MEX 7 3/8 05/13/55 323bp -4bp
CHILE 5.65 01/13/37 149bp -1bp
PANAMA 6.4 02/14/35 331bp -5bp
CSNABZ 5 7/8 04/08/32 539bp +4bp
MRFGBZ 3.95 01/29/31 300bp -0bp
PEMEX 7.69 01/23/50 646bp -2bp
CDEL 6.33 01/13/35 202bp +2bp
SUZANO 3 1/8 01/15/32 200bp +3bp
FX Level Δ DoD
USDBRL 5.82 -0.03
USDCLP 987.95 +7.13
USDMXN 20.4 -0.24
USDCOP 4160.69 -47.83
USDPEN 3.71 -0.02
CDS Level Δ DoD
Mexico 130 3
Brazil 179 2
Colombia 203 4
Chile 61 1
CDX EM 97.45 (0.01)
CDX EM IG 100.93 (0.00)
CDX EM HY 93.68 (0.07)
Main stories recap:
Asia closed weaker and CEEMEA bonds were wider but most Latam bonds fully recovered their losses and then some as Trump gave a reprieve to Mexico after the country announced they would send 10,000 National Guard troops to the US border. Mex bonds ended up 4 bps tighter on the day while Pemex was 2 bps tighter after being 20 bps wider in the morning session. Panama bonds also outperformed with the country announcing it would allow military ships to enter the Panama Canal for free after Secretary of State arrived in the country this past weekend with some critical comments that echoed the US administration’s sentiments.
Want to read more?
Find more articles and bullets on these widgets:
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.
