EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (30 May)
Source: BBG
Measure Level Δ DoD
5yr UST 3.98% -2bp
10yr UST 4.41% -0bp
5s-10s UST 43.7 +2bp
WTI Crude 60.6 -0.3
Gold 3294 -23.6
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 867bp +12bp
BRAZIL 6 1/8 03/15/34 264bp +2bp
BRAZIL 7 1/8 05/13/54 372bp +1bp
COLOM 8 11/14/35 408bp +2bp
COLOM 8 3/8 11/07/54 499bp +2bp
ELSALV 7.65 06/15/35 451bp -0bp
MEX 6 7/8 05/13/37 277bp +2bp
MEX 7 3/8 05/13/55 341bp +1bp
CHILE 5.65 01/13/37 154bp +1bp
PANAMA 6.4 02/14/35 333bp +2bp
CSNABZ 5 7/8 04/08/32 579bp +3bp
MRFGBZ 3.95 01/29/31 287bp +1bp
PEMEX 7.69 01/23/50 673bp +12bp
CDEL 6.33 01/13/35 220bp +1bp
SUZANO 3 1/8 01/15/32 211bp -0bp
FX Level Δ DoD
USDBRL 5.71 +0.04
USDCLP 945.75 +10.42
USDMXN 19.4 +0.05
USDCOP 4159.43 +38.80
USDPEN 3.62 +0.00
CDS Level Δ DoD
Mexico 120 (0)
Brazil 162 (1)
Colombia 232 4
Chile 59 2
CDX EM 96.79 (0.07)
CDX EM IG 100.92 (0.01)
CDX EM HY 92.59 (0.12)
Main stories recap:
Comments
· Global equity indexes were mixed while U.S. Treasury yields were unchanged across most of the curve. U.S. consumer sentiment improved while inflation expectations fell vs last month.
· The EM primary market was quiet. Asia secondary market benchmark bond spreads were quoted as much as 5bps tighter while CEEMEA spreads moved within a -5/+10bps range.
· LATAM bond spreads generally widened 1-4bps, though there were a few outliers.
· Higher beta Pemex and Argentina underperformed with prices down ¼ to ¾ points. Bonds of Brazil environmental services company Ambipar bounced back further today, up a point but still a couple of points lower than prior to the 5 point decline on Wednesday.
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Historical bullets
US TSYS: Tsys & Stocks Break Resistance, Month End Partially Cited
- Treasuries broke through narrow session range late Wednesday, look to finish mostly higher, curves moderately steeper with bonds underperforming all day.
- Early data driven volatility, Tsys tested major resistance after softer than expected April ADP at 62k (sa, cons 115k) after a downward revised 147k (initial 155k) in March.
- Rates and equities reverse course - extended lows after higher than expected GDP Price index, Personal Consumption and Core PCE data. Stocks rebounded after solid PCE income growth reflected in the PCE data partially offset by tariff impacts.
- Jun'25 10Y currently +7.5 at 112-12.5 vs. -16 high (10Y yld currently 4.1562%), resistance at 112-16 (1.0% 10-dma envelope) followed by 113-04 (76.4% retracement of the Apr 7 - 11 bear leg).
- Trade negotiation related headlines continued to deliver real vol to markets, but it appeared late bounce in rates and stocks was at least partially month end related.
US: Trump To Deliver Speech On 'Investing In America' Shortly
US President Donald Trump is shortly due to deliver his second major speech in two days to mark his first 100 days in office, following a speech in Michigan yesterday. Today's speech is entitled "Investing in America" and will be delivered from the White House Cross Hall. LIVESTREAM
- Trump is expected to tout a reported USD$5tn of investments in the US since his entered office. Per the BBC, he will be joined at the White House event by CEOs from Nvidia, GE Aerospace, Johnson & Johnson, Eli Lilly, SoftBank, and others.
- Trump’s campaign rally-style speech at Macomb Community College, Michigan, yesterday primarily focused on border security and immigration, the policy area where he retains the most public support amid a steady decline in his approval.
- Trump travelled to Michigan with a package of tariff relief for the auto industry designed to insulate the sector from the effects of ‘tariff stacking’. The Executive Order can be read here. A White House fact sheet here.
USDCAD TECHS: Trend Needle Points South
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4108 50-day EMA
- RES 1: 1.3906/3959 High Apr 17 / 20-day EMA
- PRICE: 1.3820 @ 16:51 BST Apr 30
- SUP 1: 1.3781 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD is unchanged and remains bearish. A fresh cycle low on Apr 21 reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3959, the 20-day EMA.
