MEXICO: TIIE Curve Shifts Lower Post Inflation Data, Barclays See Banxico Slowing Hikes
Mar-09 15:24
- Mexico’s lower-than-expected inflation data for February is working against the Mexican peso on Thursday, with USDMXN unable to gather any momentum below yesterday’s lows. The pair has now risen from 17.90 to 18.04, even though broad dollar indices have softened. The TIIE swaps curve is enjoying a relief rally following the data with 2-year swap rates falling around 22bps.
- Barclays have acknowledged the positive market reaction in rates, however, they believe that US rates will remain the main driver in the coming weeks. They state that a simple Taylor Rule shows that Mexican rates have the highest sensitivity to the Fed versus its EM peers. They do not see space for TIIE to decouple too much from US rates until markets receive more clarity from the US data on what the terminal rate looks like.
- On Banxico policy, Barclays say that inflation is on track for Banxico to act as it has guided, slowing the pace of hikes at its next meeting on March 30 to 25bp, and moving closer to the end of the cycle with a last 25bp rate hike in May.
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PIPELINE: Intel, Comcast Historical Issuance Comparison
Feb-07 14:54
- Date $MM Issuer (Priced *, Launch #)
- 02/07 $Benchmark Intel 7pt jumbo: 3Y +100a, 5Y +130a, 7Y +155a, 10Y +175a, 20Y +195a, 30Y +215a, 40Y +235a (for historical reference, Intel issued $6B on Aug 2'22: $1.25B 5Y +90, $850M 7Y +120, $1.25B 10Y +140, $1.75B 30Y +185, $900M 40Y +200; prior to that, Intel issued $5B in September 2021)
- 02/07 $5B #EIB 10Y SOFR+48
- 02/07 $5B #World Bank (IBRD) 7Y SOFR +47
- 02/07 $3.5B #Export Development bank Canada (EDC) 5Y SOFR+39
- 02/07 $2B #CDP Fncl 3Y +58
- 02/07 $1.75B #Swedish Export Bank (SEK) 7Y SOFR +46
- 02/07 $Benchmark Vodafone 30Y +220a, 40Y +240a
- 02/07 $Benchmark Starbucks 3Y +90a, 10Y +135a
- 02/07 $Benchmark IDB Invest 5Y SOFR+59
- 02/07 $Benchmark PIF (sovereign wealth fund) 7Y +145a, 12Y +175a, 30Y +215a
- 02/07 $Benchmark Comcast WNG 10Y +120a (issued $2.5B on Oct 31'22 $750M 3Y +80, $750M 5Y +110, $1B 10Y +150)
EGB SYNDICATION: France 30y OAT: Priced
Feb-07 14:48
- Reoffer:97.422%/ 3.13% / 0.75
- Spread set earlier at 0.75% May-53 OAT +9bps (guidance was +11bps area)
- Reference: May-53 OAT 2053 55.08 / 3.04%
- HR: HR: 142% versus .75% May-53 OAT
- Coupon: 3.00%
- Size set earlier at E5bln (in line with MNI expectation)
- Books closed in excess of E47bln (inc E2.25bln JLM interest)
- Maturity: 25th May 2054
- ISIN: FR001400FTH3
- Bookrunners: BNPP(DM and B&D)/CACIB/CITI/HSBC/SG
- Timing: T.O.E 15.42 CET/ 14.42 GMT /FTT immediately
From market source
US-EU: Habeck And Le Maire Arrive In Washington For Discussions On IRA
Feb-07 14:42
German Economy Minister Robert Habeck and French Finance Minister Bruno Le Maire have arrived in Washington for a key meeting with Biden administration officials on the Inflation Reduction Act.
- Edited: Typo corrected in Le Maire quote
- The meeting, attended by Treasury Secretary Janet Yellen, Secretary of State Antony Blinken, and Commerce Secretary Gina Raimondo, comes ahead of a special EU summit on Thursday Feb 9 to discuss the European response.
- Habeck told reporters: "We still have a couple of months for a solution on critical raw material in IRA."
- Le Maire: "We need to ensure the maximum number of European companies are included in IRA framework."
- Habeck said yesterday that he believes a “de facto” free trade agreement could be reached between Europe and the United States to mitigate harms to European companies.
- Habeck: "I can imagine that there will be agreements in certain sectors that have the same effect as equal treatment. And then I would be satisfied. One should not be picky about it… if it is not a free trade agreement, but a regulatory framework where the same goods are valued equally in the same market, then what we actually need has been achieved."
