LATIN AMERICA: Credit Market Wrap

Source: Bloomberg Finance L.P. Measure Level DoD 5yr UST 3.65% +1bp 10yr UST 4.08% +1bp 5s-10s UST 43.0 +0bp WTI Crude 66.4 -0.0 Gold 5086 +89.4 Bonds (CBBT) Z-Sprd DoD ARGENT 5 01/09/38 688bp -8bp BRAZIL 6 1/8 03/15/34 230bp -4bp BRAZIL 7 1/8 05/13/54 311bp -2bp COLOM 8 11/14/35 316bp +1bp COLOM 8 3/8 11/07/54 372bp +0bp ELSALV 7.65 06/15/35 345bp -0bp MEX 6 7/8 05/13/37 215bp -3bp MEX 7 3/8 05/13/55 264bp -1bp CHILE 5.65 01/13/37 111bp -0bp PANAMA 6.4 02/14/35 177bp -1bp CSNABZ 5 7/8 04/08/32 920bp -9bp MRFGBZ 3.95 01/29/31 274bp -1bp PEMEX 7.69 01/23/50 454bp -3bp CDEL 6.33 01/13/35 161bp -0bp SUZANO 3 1/8 01/15/32 168bp -1bp FX Level DoD USDBRL 5.17 -0.04 USDCLP 866.47 +0.80 USDMXN 17.1 -0.13 USDCOP 3706.23 +7.31 USDPEN 3.36 +0.00 CDS Level DoD Mexico 86 (1.79) Brazil 127 (3.44) Colombia 204 (0.52) Chile 43 (0.48) CDX EM 98.81 0.03 CDX EM IG 101.36 0.04 CDX EM HY 95.86 0.08 Main stories recap: Treasury yields were little changed despite stronger than expected inflation data in the Q4 GDP report and the Supreme Court ruling on Pres Trump's tariff policy that said IEEPA does not authorize the president to impose tariffs. LatAm secondary market benchmark $ bond spreads generally tightened 1-3bp. Mexico's Alpek credit rating was downgraded by Moody's to Ba1 from Baa3 and that followed similar rating actions yesterday by S&P and Fitch that also lowered ratings to the high yield category from investment grade. ALPEKA bonds fell pt today but were still up 1 point for the week as yields were already similar to Mexico high yield comps. Bonds of Brazil's CSN inched pt higher on news reports of a potential buyer of their cement assets. While the market is anxious to see asset sales to reduce debt, actual implementation may be needed at this point to trigger a bigger market reaction.

COLOMBIA: Finance Minister to Meet With Banks

"*COLOMBIA'S FINMIN TO MEET BANK CHIEFS MONDAY: BLURADIO" - Bbg

US DATA: New Home Sales End 2025 Strong, But Early 2026 Momentum Doubtful

As with other housing market data, new home sales finished 2025 strong - but it's questionable whether momentum will continue into 2026. * In a combined November/December report (due to federal government shutdown delays), new sales closed the year at 745k on a seasonally-adjusted, annualized basis. They were up 15.5% in November to 758k, thus down 1.7% in December, but those were the two strongest months since February 2022. * Sales soared in the West region, to 170k in December from 110k in October. * Supply tightened, with months of supply down to 7.6 vs 9.0 in October, lowest since March 2022. Median prices were down 2.0% Y/Y, reflective of seller discounts. * But inventories remain elevated on a historical basis. And despite the jump at the end of the year, 2025 as a whole saw average monthly new home sales basically identical to 2024 (682k vs 685k). * And judging from homebuilder sentiment, any improvement looks to have been short-lived. The pullback in the NAHB survey to 36 in February from 37 prior (38 consensus) marked a 5-month low and the 2nd straight decline, suggesting any nascent momentum in homebuilder sentiment has halted (the NAHB had risen in each of the 4 months prior to January). * We continue to expect housing starts/residential construction momentum to remain limited.

TARIFFS: Trump: To Initiate 10% Global Tariff Under Section 122

US President Trump announces in the wake of the Supreme Court decision on IEEPA: "Effective immediately. All national security tariffs under section 232, and existing section 301 tariffs... remain in place, fully in place and in full force and effect. Today I will sign an order to impose a 10% global tariff under section 122 over and above our normal tariffs already being charged. And we're also initiating several section 301 and other investigations to protect our country from unfair trading practices of other countries and companies." * A reminder re Section 122: it gives the President the authority to impose tariffs of up to 15%. While this could theoretically be imposed immediately, they would only be allowed to remain in place for 150 days before requiring Congressional approval. So, this is a quick partial solution while the slower, longer-term measures are rolled out.