EM LATAM CREDIT: YPF: Vaca Muerta Pipeline Funding - Positive

• Taking account of price action since the US/China trade tensions easing, GBP stands around the middle of the G10 leaderboard, underperforming against the USD and higher-beta antipodean currencies amid firmer risk sentiment. However, sterling is advancing against the likes of the Euro as well as the low-yielders.
• Yesterday's BoE watchers conference confirmed the hawkish turn markets took away from last week's MPC meeting. This has weighed on EURGBP, which appears vulnerable to a continuation of the risk-on theme amid (i) Sterling's higher beta and (ii) the fact that a further hawkish repricing potentially has more room to run for Sterling- than Euro-denominated markets - through April 2026, GBP OIS prices 63bp of easing, and EUR OIS only 46bp from current levels.
• From a technical perspective, EURGBP trading to a fresh pullback low Monday is strengthening its current bearish theme. The cross has cleared support at 0.8468, the 50-day EMA, signalling scope for a continuation lower. Clearance of round number support at 0.8400 would open up 0.8359, a Fibonacci projection. On the upside, initial resistance is seen at 0.8541, the May 2 high.

Latest SOFR options include two-way call spreads in Sep'25 & Dec'25. Underlying scaling off early morning highs, projected rate cut pricing holds steady to mildly softer vs. late Monday levels (*) as follows: Jun'25 steady at -2.1bp, Jul'25 at -10.3bp vs. (-9.8bp), Sep'25 -25.9bp (-26.8bp), Oct'25 -39.6bp (-40.3bp).

• -10,000 SFRZ5 96.25/97.00 call spds, 17.25 vs. 96.23/0.30%
• Block, 6,660 SFRU5 95.81/SFRZ5 95.75 put spds, 1.0 net at 0941:39ET
• +10,000 0QN5 96.87/97.00 call spds, 3.0 ref 96.615
• -4,000 SFRU5 96.00/96.25/96.50 call flys, 3.0 ref 95.965
• +5,500 SFRU5/SFRZ5 98.00 call spds 1.75 net (Dec over)

Gilts continue to look further afield for cues, with post-U.S. CPI movements in Tsys driving things over the last 90 minutes or so.

• Futures have been unable to test early session highs during rallies, while bears have been unable to threaten next support at the April 15 low (91.43), with the contract basing at 91.50 thus far.
• Still, the bearish short-term technical threat remains intact in the contract.
• Yields are 2bp lower to 4bp higher, twist steepening theme remains intact, with the front end seemingly benefitting from the softer-than-expected private wage data identified pre-open.
• That prevented 2s from trading too far above 4.00% early on , last 3.98%.
• Meanwhile 10s have been capped by the April 15 high (4.672%).
• 2s10s on for the highest close since April 22, last 68.5bp, but still shy of the April cycle closing high (78.5bp).
• 5s30s ~3.3bp steeper, but comfortably within the May range, last 129.5bp, ~9bp below April cycle closing highs.