EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (28 Feb)
Source: BBG
Measure Level Δ DoD
5yr UST 4.01% -6bp
10yr UST 4.20% -6bp
5s-10s UST 19.2 +1bp
WTI Crude 70.0 -0.3
Gold 2857 -20.2
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 938bp +12bp
BRAZIL 6 1/8 03/15/34 276bp +6bp
BRAZIL 7 1/8 05/13/54 358bp +4bp
COLOM 8 11/14/35 383bp +5bp
COLOM 8 3/8 11/07/54 466bp +4bp
ELSALV 7.65 06/15/35 434bp +8bp
MEX 6 7/8 05/13/37 266bp +1bp
MEX 7 3/8 05/13/55 322bp +2bp
CHILE 5.65 01/13/37 160bp +4bp
PANAMA 6.4 02/14/35 334bp +18bp
CSNABZ 5 7/8 04/08/32 571bp +11bp
MRFGBZ 3.95 01/29/31 313bp +3bp
PEMEX 7.69 01/23/50 660bp +10bp
CDEL 6.33 01/13/35 204bp +2bp
SUZANO 3 1/8 01/15/32 197bp +6bp
FX Level Δ DoD
USDBRL 5.88 +0.05
USDCLP 962.74 +9.92
USDMXN 20.6 +0.07
USDCOP 4153.92 +22.42
USDPEN 3.69 +0.02
CDS Level Δ DoD
Mexico 122 (2)
Brazil 181 5
Colombia 194 2
Chile 56 0
CDX EM 97.63 0.05
CDX EM IG 101.08 0.01
CDX EM HY 93.81 0.03
Main stories recap:
Asian equity markets opened lower with concerns about US tariffs and their effect on global trade while EM Asia benchmark bond spreads widened 1-2bps. CEEMEA was quiet in both primary and secondary with benchmark bond spreads stable. There were no new issues in Latam as well. Latam secondary spreads were generally wider by 2-3 bps. Panama underperformed as the market gave back yesterday’s gains with President Mulino saying that he would prioritize social security reform first and then consider action on the copper mine Cobre Panama. Argentina and Province of Buenos Aires bonds were also down as President Milei feuded publicly with his arch rival Province of Buenos Aires governor Kicillof over security issues which at least temporarily united the Peronist opposition after having been divided recently.
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Historical bullets
JPY: Yen Outperforms Broader USD Gains, USD/JPY Near Term Bear Threat Remains
USD/JPY struggled for meaningful upside through Wednesday trade. Moves above 155.50 drew selling interest, while dips to just under 155.00 drew buying interest. We track near 155.30 in early Thursday dealings, after a yen gain of around 0.15% for Wednesday's session. Yen outperformed the rest of the G10, with most currencies down, led by the A$.
- The DXY and BBDXY USD indices are a touch higher for Wednesday trade, with a brief spike higher as the FOMC unfolded. The FOMC decided to remove the reference to inflation making progress towards the goal, despite it remaining somewhat elevated. However, Chair Powell explained that this was merely “cleaning up the language” and was not intended to send a signal.
- US yields sit slightly higher at the front end of the curve, but little changed at the back end. US-JP yield differentials are holding close to recent lows.
- A softer US equity tone (SPX off 0.47%, Nasdaq down 0.51%), with a flurry of earnings from the tech space late in US trade, may have also helped the yen at the margins. AUD/JPY is sub all key EMs, and back around the 96.70/75 handle. The 96.00 region has marked lows so far in 2025.
- For USD/JPY technicals, a near term bear threat persists following Monday's sharp pull back (low of 153.72). A resumption of weakness would open 152.55, a Fibonacci retracement point. Initial firm resistance is at 156.75, the Jan 23 high.
- Note in the option expiry space today, the following for NY cut later today: Y154.00($627mln), Y154.75($700mln), Y155.00($1.4bln), Y156.00($544mln).
- On the local data calendar today we just have weekly offshore investment flows.
ASIA: Coming Up In The Asian Session On Thursday
| 0200GMT | 1000HKT | 1300AEDT | Philippines 4Q GDP |
ASIA: Coming Up In The Asia-Pac Session On Thursday
| 2145GMT | 0545HKT | 0845AEDT | New Zealand Dec Trade Balance |
| 2350GMT | 0750HKT | 1050AEDT | Japan Jan Investors Flows |
| 0000GMT | 0800HKT | 1100AEDT | New Zealand Jan ANZ Activity Outlook |
| 0000GMT | 0800HKT | 1100AEDT | New Zealand Jan Business Confidence |
| 0030GMT | 0830HKT | 1130AEDT | Australia 4Q Import Price Index |
| 0110GMT | 0910HKT | 1210AEDT | Japan Rinban Operations |
| 0135GMT | 0935HKT | 1235AEDT | New Zealand To Sell 31, 36 & 41 Bonds |
| 0320GMT | 1120HKT | 1420AEDT | Australia RBA's Jones-Fireside Chat |
| 1001GMT | 1801HKT | 2101AEDT | New Zealand Jan CoreLogic Home Value |
