EM LATAM CREDIT: Petrobras Africa Expansion – Positive
(PETBRA; Ba1/BB/BB)
“Petrobras aims to make Africa its main exploratory region outside Brazil, CEO says” – Reuters
• The Brazil government-controlled energy company has been frustrated with delays in getting permits to explore in country, especially in environmentally sensitive areas near the Amazon rainforest region. Brazil is hosting the United Nations climate change conference (COP30) in November.
• Petrobras is seeking to return to Africa after divesting assets under past government administrations, according to Reuters who interviewed CEO Magda Chambriard on June 5, 2025.
• Ivory Coast, Nigeria, Angola and Namibia have expressed interest in partnering with Petrobras. Ivory Coast recently granted exclusivity to the company in negotiating for nine offshore exploratory blocks.
• In her interview with Reuters, Chambriard cited geological similarities between the eastern margin of Brazil and Africa as one of the reasons to choose that continent for expansion.
• A few years ago the company bought a stake in an offshore oil field in South Africa and last year it acquired an interest in fields in the island nation of Sao Tome and Principe in Central Africa.
• Petrobras 2035s were last quoted T+221bps, 25 bps tighter QTD and 27bps tighter YTD. Petbra 2035 bonds were quoted 4bps through the Brazil (BRAZIL; Ba1/BB/BB) 2035 sovereign bonds.
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GBPUSD TECHS: Trend Structure Remains Bullish
- RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 3: 1.3550 High Feb 24 ‘22
- RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 1: 1.3444 High Apr 28 / 29 and the bull trigger
- PRICE: 1.3346 @ 16:34 BST May 7
- SUP 1: 1.3257 Low May 5
- SUP 2: 1.3245 20-day EMA
- SUP 3: 1.3041/3058 Low Apr 14 / 50-day EMA
- SUP 4: 1.2968 Low Apr 11
Recent weakness in GBPUSD appears corrective and the pair continues to trade inside a range with support at 1.3245, the 20-day EMA, intact. A clear break of this average would signal scope for a deeper retracement. Note that moving average studies remain in a bull-mode position, signalling a dominant underlying uptrend. A resumption of gains would open 1.3510, a Fibonacci projection.
US: Trump's Approval Rating Stabilises But Economy Remains Liability
Silver Bulletin has published a new detailed breakdown of President Trump's polling performance, noting that the economy is now a “liability” for the administration, despite a stabilisation of his approval.
- Silver notes: “As you can see, the issue approval pattern from Trump’s first term — when the economy was generally his strongest issue, but he was often fighting losing battles on the “culture wars” — has somewhat reversed. This time around, immigration is one of Trump’s least bad topics, although his numbers have nevertheless declined. However, the economy is a considerably bigger liability.”
- Silver adds: “Still, there’s been a slight rebound in Trump’s numbers over the past week. Might that be because he’s struck a more conciliatory tone on tariffs? The stock market has liked the change in vibes and maybe that’s improving voters’ mood, too. (We suspect that some voters may be relatively sensitive to stock prices.) That’s what this sort of data can help discern. As you can see in the chart, there’s been an uptick in his ratings on trade. And his economic approval has stabilized over the past couple of weeks.”
Figure 1: Trump Approval Rating
Source: Silver Bulletin
US: FED Reverse Repo Operation
RRP usage climbs to $154.859B this afternoon from $129.858B yesterday, total number of counterparties at 46. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.
