MEXICO: Sheinbaum Proposes Panel To Address Trade Differences With China
Sep-26 15:00
MNI London: Reuters reporting that Mexican President Claudia Sheinbaum said, “Mexico is proposing a panel to address differences with China on tariffs.” The comment comes after China “launched anti-dumping and trade barrier probes into Mexico after the Latin American country proposed higher tariffs on Chinese goods,” per SCMP.
- SCMP notes, “Analysts said the move signalled a warning from Beijing, as Mexico’s planned duties – affecting a range of countries, but sparing the US and Canada – are widely seen as an attempt to curry favour with Washington.”
- Xu Tianchen at the Economist Intelligence Unit wrote in a note, “Mexico’s actions were clearly [taken] under US pressure, seeking to appease Washington while disregarding the interests of its second-largest trading partner.”
- The Chinese Commerce Ministry said in a statement on Thursday that Mexico's tariffs would harm the interests of affected countries and undermine investor confidence in the Latin American country, per Euronews
- “China believes that, against the backdrop of the current US abuse of tariffs, all countries should jointly oppose all forms of unilateralism and protectionism and must not sacrifice the interests of third parties because of coercion,” the Commerce Ministry statement said.
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ESM ISSUANCE: USD2bln WNG New 5-Year: Priced
Aug-27 14:58
- USD2bln WNG of the new 3.75% 5-year Sep-30 ESM-Bond
- Spread set earlier at SOFR MS+39 (SA 30/360) (guidance was SOFR+40 Area, IPT was MS+42 area, that was equiv. to CT5 + ~7.3bp)
- Books closed in excess of $13.3bn excl. JLM interest
- Reoffer 99.855 to yield 3.782%
- Issuer: European Stability Mechanism (TICKER: ESM)
- Issuer Ratings: Aaa (stable) (Moody's) / AAA (stable) (S&P) / AAA (stable) (Fitch)/ AAA (stable) (Scope)
- Format: Registered Notes, Reg S (NSS) / 144A
- Ranking: Senior, Unsecured, Unsubordinated
- Listing: Luxembourg
- Settlement: 4 September 2025 (T+6 (TARGET) / T+5 (NY))
- Maturity Date: 4 September 2030 (5Y)
- HR 101% vs CT5 (T 3 ⅞ 07/31/30 )
- ISIN: Reg S: XS3171756128 / 144A: US29881WAG78
- Coupon: 3.75%, Fixed, Semi-annual, 30/360, Following, Unadjusted
- Bookrunners: CACIB(DM/B&D) / DB / JPM
From market source and Bloomberg.
The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.
STIR: BLOCK: SOFR White Pack
Aug-27 14:41
- 4,000 SOFR White packs (SFRU5-SFRM6) +0.000 at 1037:12ET - likely swap-tied sale with spds running wider in the short end
FED: September Rate Cut Base Case For Most, Though Some Holdouts Remain (2/2)
Aug-27 14:39
Elsewhere, multiple analysts now see a cut in September whereas previously they'd seen one later in 2025.
- Deutsche pulled forward their next-cut call from December to September (but still see a December cut).
- Barclays also pulled forward their view for the next cut to September.
- Natixis appears to have shifted its view for the next cut in October to be pulled to September "from this early juncture we think a September hawkish ease is more likely than not (assuming a 25bp cut), but there is still a great deal of time, and data, between now and the September FOMC meeting".
- SocGen likewise ("Previously, our base case was just one 25bp cut, and late this year (October or December). However, a rate cut at the next FOMC in September now looks an above 50% probability.")
- RBC isn't yet convinced of a cut before December: "While the odds of a rate cut next month are high, we aren’t yet convinced it is a slam dunk."
