EM LATAM CREDIT: Pemex: Mgmt Change - Neutral
(PEMEX; B1/BBB/BB*+)
The head of Pemex's international commercial trade and marketing entity PMI Comercio Internacional (PMI), Margarita Perez, is being replaced by a Mexico finance ministry official , Adam Enrique Ramos.
The government tightened its grip on the government-owned energy company as it attempts to streamline operations and allocate more capital to investment to make it less dependent on the government in the future.
Already, the government supported a Pemex USD9.9bn bond buyback and set aside about USD14bn in next year's budget for Pemex debt obligations but has said its goal is for Pemex to not need any further support by 2027.
Pemex 50s were last quoted T+365bp, 160bp tighter since June 30th and 204bp tighter YTD as the bonds benefitted from increased government support and ratings upgrades.
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GLOBAL POLITICAL RISK: Trump To Speak To Euro Leaders Ahead Of Putin Summit
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CNN reports that the high-profile 15 August meeting between US President Donald Trump and Russian President Vladimir Putin will take place at Joint Base Elmendorf-Richardson in Anchorage, Alaska.
- In preparation for Friday’s meeting, Secretary of State Marco Rubio spoke with Russian Foreign Minister Sergey Lavrov on 12 August. “Both sides confirmed their commitment to ensure a successful event,” per a State Department readout.
- At 09:00 ET 14:00 BST, Trump will hold an emergency call with Ukrainian President Volodymyr Zelenskyy and European leaders to discuss the Ukraine war and strategy for the Putin meeting. Zelenskyy, NATO Secretary General Mark Rutte, and several European leaders will dial into the White House from Germany.
US DATA: Refis Lead An Uptick In Mortgage Applications
MBA mortgage applications increased to recent highs last week on the back of a rise in volatile refinance applications. Overall levels remains subdued however and new purchase applications continue to point an anemic trend for housing activity.
- MBA composite mortgage applications increased 10.9% sa last week after trending sideways in recent weeks, for their highest since single weeks in July and April and before that Sep 2024.
- It was however driven by a 23% increase in refis after 5.2% as new purchase applications once again saw relative underperformance with just a 1.4% increase after 1.5%.
- Comparison with 2019 averages: composite applications at 59.5%, new purchases at 62% and refis at 55%.
- These refis are reacting to a recent decline in mortgage rates, with the 30Y conforming rate falling 10bps to 6.67% after a 6bp decline the week prior. It leaves the conforming rate at its lowest since early April.
- 30Y mortgage rate to 10Y swap rate spreads remain at the low end of the 300 +/- 5bp range mostly seen since reciprocal tariffs were first detailed in early April, still wider than the 285bp averaged in Q1.
- Within the mortgage rate details, 30Y jumbo mortgage rates saw a relative correction as they increased 5bps to 6.70%. It saw the regular-jumbo spread slide from +12bp (highest since Oct 2023) to -3bp (lowest since mid-April), tentatively ending what had been a sign of some relative loosening in conditions or perhaps borrowers with higher FICO scores.
MNI: US MBA: MARKET COMPOSITE +10.9% SA THRU AUG 08 WK
- MNI: US MBA: MARKET COMPOSITE +10.9% SA THRU AUG 08 WK
