EMERGING MARKETS: UBS on Most Vulnerable EM Countries
Aug-25 09:36
- UBS identifies several countries as vulnerable according to this analysis:
- Latin America: Colombia stands out as highly vulnerable, followed by Chile. Despite having positive real rates, Colombia also has a high foreign currency debt burden. Chile has a large external funding gap and short-term foreign currency debt, partially mitigated by the fact thatChilean companies actively hedge their foreign currency exposure.
- EMEA: South Africa exhibits negative real rates and fairly elevated foreign currency liabilities in the near term. CEE: Widening current account balances in the Central andEastern European economies are also worth monitoring.
- Asia: Although the region is the least vulnerable among emerging markets, the Philippines and Thailand—both net energy importers—are set to experience deteriorating basic balances this year given elevated energy prices.
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ITALY AUCTION RESULTS: BTP-ST / BTPei
Jul-26 09:30
| 1.75% May-24 BTP Short Term | 0.10% May-33 BTPei | 2.55% Sep-41 BTPei | |
| ISIN | IT0005499311 | IT0005482994 | IT0004545890 |
| Amount | E2.5bln | E750mln | E500mln |
| Previous | E4bln | E1.25bln | E409mln |
| Avg yield | 1.71% | 1.37% | 1.45% |
| Previous | 1.63% | 0.86% | 0.04% |
| Bid-to-cover | 1.77x | 1.84x | 2.09x |
| Previous | 1.58x | 1.40x | 2.13x |
| Price | 100.09 | 87.32 | 118.48 |
| Previous | 100.24 | 92.04 | 149.14 |
| Pre-auction mid | 100.078 | 87.089 | 117.945 |
| Previous | 91.940 | 148.540 | |
| Previous date | 24-Jun-22 | 26-May-22 | 26-Jan-22 |
BONDS: Bund yields at lowest level in 2 months
Jul-26 09:28
- Core fixed income has been grinding higher this morning with Bunds futures having surpassed Friday's highs, gilt futures challenged Friday's highs, but Treasury futures sitting in below the highs. 10-year Bund yields have moved to their lowest levels since 27 May.
- The main talking point today surrounds the EU energy ministers meeting where they are discussing plans to reduce consumption.
- Today will also see the release of housing data in the US, but the market continues to look forward to tomorrow's FOMC policy announcement. See the full MNI preview here.
- TY1 futures are up 0-10 today at 119-31 with 10y UST yields down -2.0bp at 2.778% and 2y yields unch at 3.015%.
- Bund futures are up 0.61 today at 155.36 with 10y Bund yields down -4.5bp at 0.970% and Schatz yields down -2.4bp at 0.371%.
- Gilt futures are up 0.27 today at 117.55 with 10y yields down -1.9bp at 1.915% and 2y yields down -1.0bp at 1.799%.
USD: Broader base buying
Jul-26 09:25
- More a function of the USD, as EUR, GBP, CAD extends losses.
- The SEK remains the worst performer, down 0.41%.
- Some spillovers into the EUR, with the latter at session low against CHF, and JPY.
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