EM LATAM CREDIT: Province of Cordoba: Argentina Provinces Int'l Bond Issuance
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"Amid tensions between the provinces and the nation over resources, Córdoba is going to Wall Street to seek USD 800 million." - Infobae
Argentina's Province of Cordoba announced investor meetings to discuss the potential issuance of up to USD800mn of 6-year average life senior unsecured bonds.
To varying degrees, the Argentina provinces rely on federal government transfers as a source of revenue. With prospects improved for the country and corporate bond issuance volume increasing, the provinces are now considering placing bonds in the international market.
The government has to authorize such issuances based on rules about debt service as a percent of province revenues. The government has suggested that issuances be used to fund infrastructure and not ongoing expenses.
With budget restraint at the Federal level there is also a need for the provinces to access funding to maintain liquidity.
Province of Santa Fe is waiting for authorization. Province of Neuquen, where the majority of the oil and gas producing Vaca Muerta shale region is located, met with investors February 2025 according to Bloomberg.
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EUROPEAN INFLATION: EUR 5y5y Inflation Swap Still Close To 2%
EUR traded inflation swaps are little changed relative to a month ago. The 5y5y HICP ex-tobacco inflation swap remains close to 2% at 2.09%, while 1-, 2- and 5-year swaps are comfortably below the 2% handle.
- The trade agreement between the US and China in early May saw market-implied EUR inflation expectations rise, as it implied a reduced risk of disinflationary trade diversion from China into the Euro-area compared to when tariffs were at triple-digit levels.
- However, the combination of soft Eurozone data (May flash PMIs and Q1 negotiated wages) and US President Trump’s latest threats of tariffs as high as 50% on the EU has prompted a renewed softening of traded inflation metrics.
- The May 2025 HICP ex-tobacco inflation swap fixing is currently 189bps.
US: Memorial Day Trading Hours
US TSY FUTURES: CFTC Shows Asset Managers Covering Some Of Long Position
The latest CFTC CoT report points to asset managers reducing their curve-wide net long by ~$12mln DV01, with the cohort only extending net longs in WN futures.
- Meanwhile, leveraged funds added to net shorts in TY & WN futures, while they trimmed net shorts across the rest of the curve. They still extended their curve-wide net short position by ~$1.5mln, with the size of the net short build in WN futures (~$4.7mn) dominating.
- Broader non-commercial net positioning saw a mix of net short setting and cover (detailed in the table below). The cohort remain net short across the curve.
Source: MNI - Market News/CFTC/Bloomberg
