EM LATAM CREDIT: Panama: Rising Debt/GDP – Negative
(PANAMA; Baa3neg/BBB-/BB+)
• Panama’s Ministry of Finance reported gross debt reached USD58.7bn for Sept. 2025, an increase of 12% YoY and 1.5% higher than last month according to local news outlet La Estrella. We reported on the risk that the country loses its investment grade rating at Moody’s and the pressure from the National Assembly to increase social spending: https://mni.marketnews.com/4oDHKuX
• Equally important though is that unlike earlier in the year when market pricing was more in line with below investment grade ratings, with Panama 35s 107bp wider than Mexico (MEX; Baa2neg/BBB/BBB-), vs now pricing is more sanguine about the credit profile at 24bp wide for 2035 notes.
• The IMF projects 59.5% gross debt/GDP for 2025. Meanwhile, debt/GDP has risen from 62.3% to 64.8% according to La Estrella, which is higher than during the COVID pandemic when it peaked at 61.5%.
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US TSY FUTURES: BLOCK: More Dec'25 5Y Sales
- -3,000 FVZ5 109-04.75, sell through 109-05 post time bid at 0738:00ET, DV01 $131,600.
- The 5Y contract trades 109-04.75 last (+3.25).
BOE: Ramsden due to speak at 13:00BST
Reeves has wrapped up so UK attention now turns towards Dave Ramsden. He is due to appear as a panellist on the policy panel at the ECB / Federal Reserve Bank of Cleveland “Inflation: Drivers and Dynamics 2025 Conference” on Monday 29 September. There is a live stream on YouTube here.
- Alongside him on the panel will be ECB Chief Economist Lane and the Cleveland Fed’s Hammack (2026 voting member).
- We place Ramsden as the most dovish member on the MPC who did not vote for a cut last week – and will be looking for confirmation of this at his appearance today.
- Markets price less than 1bp of cuts for the November MPC meeting and less than 5bp cumulatively by December. We think this is underappreciated the risk of quarterly cuts continuing. But we would September's dovish dissenters but Bailey, Breeden (who speaks tomorrow) and Ramsden to be on board for this to even be a possibility.
US TSY FUTURES: BLOCK: Dec'25 5Y Sale
- -4,000 FVZ5 109-04.5, post time bid at 0727:30ET, DV01 $175,500.
- The 5Y contract trades 109-05 last (+3.5)
