US ENERGY SECTOR: Repsol: Report of Reverse Merger with APA
• Repsol's management had communicated a liquidity event for the Upstream unit, including an IPO, a stake sale or a reverse merger. We think the deal would accelerate the Unit's US listing while expanding its US assets. Likewise, APA's international footprint would be significantly increased, driving diversification unlike peers largely concentrated in the Permian. Repsol's upstream unit is present in 11 countries and the first phase of its Alaska project is expected to start up early 2026.
• The upstream unit had been valued at $19B in 2022 when Repsol sold a 25% stake to EIG Global Energy partners.
• We would expect Repsol to use proceeds for its low-carbon investments and returns to shareholders as gearing at the end 3Q25 was 20.5%, in line with its current rating.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUD: A$ Underperforms On US-China Trade Jitters, Talks Are Taking Place
AUDUSD trended lower on Tuesday reaching 0.6440 driven by US-China trade tensions. It then began recovering towards 0.6500 following comments from US trade representative Greer confirming that staff-level talks with China were taking place reassuring markets that negotiations may solve the issues. While risk sentiment improved, AUDUSD didn’t return to levels around 0.6510 where it has been trading earlier in the day and finished down 0.4% to 0.6486. It is currently around 0.6484. The USD index came off its highs to be down 0.1%.
- China reiterated Tuesday its right to control rare earth exports and that the US should negotiate. It also said it would implement curbs on 5 US units of Hanwha and look at how the US shipping investigation will impact China and if any of China’s companies are cooperating with it.
- The announcement saw Aussie sell off and underperform most of the G10 except NOK.
- Risk-averse euro was one of the best performers leaving AUDEUR down 0.8% to 0.5588 after a low of 0.5573. It is at 0.5586 today. AUDJPY was 0.7% lower at 98.477 after reaching 97.863 and is currently around 98.43.
- AUDNZD fell to 1.1323 and finished down 0.3% to 1.1349. The September RBA minutes were very cautious focusing on upside risks to its forecasts.
- RBA Assistant Governor Hunter speaks at 1030 AEDT today and Westpac’s lead indicator for September is released.
ASIA: Coming Up In Asia Pac Markets On Wednesday
| 2345BST | 0645HKT | 0945AEDT | RBNZ Chief Economist Speaks |
| 0030BST | 0730HKT | 1030AEDT | Australia Sep Westpac leading Index |
| 0030BST | 0730HKT | 1030AEDT | RBA's Hunter Speech |
| 0100BST | 0800HKT | 1100AEDT | Australia 2035 Bond Sale |
| 0230BST | 0930HKT | 1230AEDT | China Sep Inflation |
| 0400BST | 1100HKT | 1400AEDT | South Korea Aug Money Supply |
| 0435BST | 1135HKT | 1435AEDT | Japan 20yr Bond Sale |
| 0530BST | 1230HKT | 1530AEDT | Japan Aug F IP/Capacity Utilization |
Source: Bloomberg Finance L.P./MNI
FED: Boston's Collins One Of 5 (of 12) Holdouts To Oct+Dec Cuts
As we noted earlier, Boston Fed President Collins (who votes in the next 2 meetings) is likely one of the 2 FOMC members who only saw 1 more cut this year in her September Dot Plot submission - she confirms it in Q&A: "a bit more easing, perhaps another 25 basis points of easing might be appropriate."
- And it sounds like she might support a cut in October, before seeing a pause thereafter: "having changed in September, if we were to make an additional change, I could also see scenarios where it would then be appropriate to hold over time."
- As such back-to-back October / December cuts look to be supported by 7 of 12 2025 FOMC members, with all four regional presidents eyeing either one or no more cuts. The core of the Committee including all on the Board except for Barr will support cuts though as it stands, and we think the bar is fairly high for the holdouts to dissent.
- Below is where we see the 19 end-2025 Fed funds rate dots:
