LATAM: Paraguay Raised To Investment Grade By Moody's
Jul-26 18:29
- "PARAGUAY TO INVESTMENT GRADE BY MOODY'S; OUTLOOK TO STABLE" - BBG
- Paraguay‘s long-term foreign debt rating was upgraded by Moody’s to Baa3, from Ba1.
- “The upgrade of Paraguay's ratings reflects a combination of factors, including robust and sustained economic growth and our expectations that the economy has become more resilient to shocks, and a track-record of institutional reforms that has improved our assessment of institutional and governance strength.” – Moody’s
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COMMODITIES: Crude Returns to Gains, Spot Gold Falls Back
Jun-26 18:26
- WTI is again trading higher despite an unexpected crude build in the latest EIA data. Sentiment for crude remains bullish overall during the summer due to constrained supply and rising demand.
- WTI Aug 24 is up 0.3% at $81.0/bbl.
- For WTI futures, the clear breach of resistance at $80.11, the May 29 high, paves the way for $82.24, a Fibonacci retracement point. Initial firm support to watch is $78.65, the 50-day EMA.
- Spot gold has fallen another 0.8% to $2,300/oz on Wednesday, its lowest level since June 13 and around 6% below last month’s record high.
- Gold continues to trade below resistance and a bear threat remains present, with attention on $2,277.4, the May 3 low. Clearance of this price point would also strengthen a bearish theme.
- Initial firm resistance is $2,387.8, the Jun 7 high.
- Meanwhile, copper is trading broadly unchanged at $437/lb, after falling yesterday to its lowest level in more than two months.
- Copper is down by almost 15% from its May 20 record high as soft market conditions in China have weighed on prices.
- A corrective cycle in copper futures has seen the contract trade through the 20-day EMA, followed by a breach of the 50-day EMA. This suggests potential for a deeper retracement towards $426.12, a Fibonacci retracement.
- Key resistance has been defined at $513.10, the May 20 high.
OPTIONS: US Options Summary
Jun-26 18:18
Wednesday's US rates/bond options flow included:
- TY 111.00p, bought for 38, 39 and 40 in 15k total.
- SFRH5 95.50/96.00/96.50c fly, bought for 6 in 1k
- SFRN4 94.81/94.68ps 1x2, traded for 1.75 in 5k
- SFRQ4 94.81/94.93cs 1x2, traded for 2 in 5k
- SFRU5 95.75/95.25ps 1x2, sold the 2 at 3.5 in 10k (was also sold Yesterday at 3.5 in 10k)
- SFRX4 95.00/94.87/94.75p fly, bought for 2.25 in 10k
- 0QN4 95.81/95.68ps, traded for 4.5 in 2.5k
- 0QZ4 96.25/96.75cs vs 2QZ4 96.37/96.75cs traded half in 2k
US: House Financial Services Committee To Meet Shortly On Fed Stress Testing
Jun-26 18:02
The Republican-controlled House Financial Services Committee subcommittee on Financial Institutions and Monetary Policy is due to meet shortly to consider the bill, H.R.8591 – “To amend the Federal Reserve Act to add requirements to the annual report of the Board of Governors of the Federal Reserve System, and for other purposes.” LIVESTREAM
- The committee will hear testimony from Sean Campbell, Chief Economist at Financial Services Forum, Francisco Covas, Executive Vice President at the Bank Policy Institute, Jonathan Gould at Jones Day and Greg Feldberg, Research Director at the Yale School of Management.
- The hearing memorandum notes: “…the Dodd Frank Act requires the Federal Reserve to conduct stress tests of certain bank holding companies to determine whether they have “the capital, on a total consolidated basis, necessary to absorb losses as a result of adverse economic conditions.”
- “The hearing will examine stress testing and scenario analysis, including whether the Federal Reserve should decouple stress tests from capital requirements.”
- The hearing comes shortly before the Federal Reserve announces results from its annual bank stress tests at 16:30 ET 21:30 BST.
- The Fed notes: “This year, 32 banks with $100 billion or more in total assets are subject to the Board's stress tests. The scenario includes a severe global recession with heightened stress in commercial and residential real estate markets. Separately, the exploratory analysis includes four separate hypothetical elements, including two funding stresses applied to all banks tested and two market shocks applied to only the largest and most complex banks.”
