EM LATAM CREDIT: Argentina (ARGENT; Caa3pos/CCC/CCC): IMF Deal Structure
“IMF: The agreement will include a $5.5 billion refinancing during Milei's term and ease bondholder payments.” – Infobae
Supportive for prices
• Argentina’s President Milei signed a decree (DNU; Decreto de Necesidad y Urgencia) which empowered him to contract a new credit program with the IMF in which he sketched out some details of the agreement.
• Future IMF principal repayments will be paid for by new disbursements from the IMF until 2029 while interest will still be due and payable. It is expected that USD18bn will be disbursed by 2029, according to Infobae.
• The majority of the USD18bn is concentrated between 2028 and 2029, with USD6.5 billion and USD 7.03 billion, according to Infobae.
• The funds that would have been used to make those IMF payments will instead be used to pay off government obligations to the Central Bank.
• Link to the article:
https://www.infobae.com/economia/2025/03/12/fmi-el-acuerdo-incluira-una-refinanciacion-de-usd-5500-millones-durante-el-mandato-de-milei-y-aliviara-los-pagos-a-bonistas/
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Historical bullets
US DATA: NY Fed Near-Term Inflation Expectations Bely U.Mich Jump
- The NY Fed consumer survey saw 1Y and 3Y inflation expectations unchanged in January at 3.0% although the 5Y bounced three tenths after a two tenth decline to 3.0% for its highest since May.
- 1Y inflation expectations have been particularly steady in recent months, averaging 3.0% since June in a 2.9-3.0% range.
- That’s in contrast to the U.Mich equivalent which has ramped up to 4.3% as of last week’s preliminary February release after 3.3% in July, but does have a pronounced issue with partisanship. It was 2.8% prior to Trump’s inauguration and 2.7% prior to the November presidential election.
- That said, the NY Fed’s 5Y metric is likely to be watched from here, with the 3.0% at joint highs for the limited history back to Jun 2022.
US TSY FUTURES: BLOCK: Huge March'25 2Y/10Y Ultra Bond Steepener
Huge 2Y/10Y Ultra bond steepener posted at 1047:02ET; DV01 $900,000:
- +22,776 TUH5 102-24.38, post time offer vs.
- -22,776 UXYH5 112-07.5,sell through 112-09 post time bid
STIR: Rally In Euribor Extends Alongside Core FI
Euribor futures continued to extend higher alongside broader core FI, now +1.0 to + 5.5 ticks through the blues. Headline flow has been relatively limited throughout the day, leaving volumes comfortably below recent averages.
- The back of the whites/front of the reds lead the rally in Euribor. Upside in ERZ5 continues to be capped by the Feb 3 high at 98.125, while ERZ6 has tested the Feb 5 high at 98.010.
- The ERH5/M5 spread has flattened 3.0 ticks today to -30.0 ticks, a fresh multi-week low.
- ECB-dated OIS up to 3bps more dovish than last Friday’s close, with 90bps of easing now priced through year-end.
- ECB President Lagarde will participate in a plenary debate on the ECB’s 2023 Annual Report at the EU Parliament at 1615GMT/1715CET (text will be released). However, any near-term policy signals are unlikely to deviate from the January decision guidance.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.413 | -25.3 |
| Apr-25 | 2.216 | -44.9 |
| Jun-25 | 2.011 | -65.4 |
| Jul-25 | 1.923 | -74.2 |
| Sep-25 | 1.829 | -83.6 |
| Oct-25 | 1.807 | -85.8 |
| Dec-25 | 1.761 | -90.4 |
| Feb-26 | 1.758 | -90.7 |
| Source: MNI/Bloomberg. | ||
