EM LATAM CREDIT: Republic of Bolivia (BOLIVI; Caa3/CCC+/CCC-): Alliance Broken
“Bolivia's opposition alliance explodes over two candidates and the departure of Carlos Mesa” – Infobae
Negative for prices
• We previously wrote about Bolivia’s opposition party uniting as a positive development in bringing a more market friendly government to power in the forthcoming August election.
• That union was short lived as divisiveness re-emerged. Former President Carlos Mesa, the coordinator of the alliance, left while businessman Samuel Medina and former President Jorge Quiroga announced their separate candidacies.
• Bolivia’s opposition was uniting against the political party that has ruled the country for the past twenty years, the Movement Toward Socialism (MAS). A split opposition may have been what allowed the MAS party to win in past elections.
• BOLIVI 2028s have a sinking fund payment due March 2026 of USD333mn which when added to required coupon payments and funding of the budget deficit then compared to the country’s very limited reserves explains why the bonds are trading at distressed levels.
• BOLIVI 2030 bonds ended 2024 at USD62, soared to USD69 on hopes the opposition could win the next election and last quoted USD63.7, which was down 3 points since March month end.
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EQUITIES: Some downside Continuations
- Broader Equities are extending losses following Trump increasing Tariffs on Canada.
- The Emini futures trades at its lowest level since September and could target the September low at 5499.25, so far printed a 5554.50 low.
CANADA: Ontario Premier-'Will Not Back Down Until Trump Tariffs Gone For Good'
Posting on X, Ontario Premier Doug Ford says that "Ontario and Canada will not back down until President Trump’s tariffs are gone for good." Ford confirmed that he will be interviewed on CNBC at 1105ET (1505GMT, 1605CET).
- Ford's comments come in the wake of US President Donald Trump's escalation of incoming tariffs on Canadian steel and aluminium, threats to the country's motors industry, and repeated calls for Canada to become the US' 51st state in a recent Truth Social post (see 'US-CANADA: Trump Escalates Trade War With Canada', 1416GMT).
- This latest escalation comes amid a transfer of power in Canada, with the transition process underway following former BoC and BoE governor Mark Carney's election as governing Liberal Party leader on 9 March. Globe and Mail reports that Carney is "expecting a “seamless” and “quick” transition of government after his Monday talks with outgoing Prime Minister Justin Trudeau and cabinet."
- The Globe and Mail report claims that as part of his first cabinet, Carney "will probably keep the current ministers who’ve been busiest on Canada-U.S. trade issues: Mélanie Joly in Foreign Affairs, David McGuinty in Public Safety and Dominic LeBlanc in Finance."
US DATA: JOLTS Report Shows Labor Moderation Stalling After Large Rebalancing
The January JOLTS report saw higher than expected job openings whilst annual revisions have left a slightly weaker than first thought trend early in 2H24 before some recent firming. The quits rate increase was exaggerated by rounding but is nevertheless a rare second month with an unrounded increase although it’s too soon to materially show impact from DOGE pressure.
- Job openings were higher than expected in January at 7.74m (sa, cons 7.6m) after a downward revised 7.51m (initial 7.6m) in Dec.
- Ratio to unemployed: 1.13 after a downward revised 1.09 (initially 1.10) in Dec and 1.13 (initially 1.15) in Nov.
- This ratio continues to broadly stabilize, having averaged 1.1 since June, although the latest profile looks slightly more upward sloping than before today’s annual revisions: it has now averaged 1.06 in Jul-Sep before 1.11 in Oct-Jan. For context, it averaged 1.2 in 2019 and 1.0 in 2017-18.
- The 0.2pp increase in the quits rate was exaggerated by rounding (it lifted 0.10pps from 1.947% to 2.053%) but it’s still a second monthly increase on an unrounded basis after a prior steady trend decline and is the highest since May 2024.
- Federal government quit rates remained particularly low at 0.4% (within total government at 0.8%) but this lagged January data won’t show impact from DOGE pressure on federal government roles.
- The hire rates meanwhile continued to stabilize near recent lows, at 3.4% or 3.7% for the private sector, at levels comfortably below those in the build-up to the pandemic (all workers 3.9% 2019, 3.8% 2017-18).
