EM LATAM CREDIT: Argentina Govt to Discuss Rates/Service with Distributors
"The Government summoned Edenor and Edesur to a public hearing to discuss the rate increases and the quality necessary for the public service of electricity distribution during the next 5 years." - Clarin
• Continuation of government process to move to more of free market economy running the utilities as a business and weaning both consumers and industry off subsidies as well as make service more reliable.
• Goal is to reduce power outages by 40%. The fare increases will apply from April 1. There have already been large increases in electricity bills when subsidies were reduced after past years of rate freezes.
• The Ministry of Economy capped the rate hikes this mid-term election year at 9.9%. For now, rates will be updated at the discretion of the Government. “On a monthly basis, Minister Luis Caputo uses the regulated prices of energy, transport and water as anchors to slow down the evolution of prices and set a future pattern of inflation; in January that band was from 1.6% to 1.8%”, according to Clarin.
ARGENT 4.125% 2035, $68.22, +.28
See the link to the article for more information:
https://www.clarin.com/economia/gobierno-convoco-edenor-edesur-audiencia-publica-discutir-tarifas-calidad-servicio-2030_0_t1KNaR698f.html
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US TSY FUTURES: Extending Highs
- Treasury futures continue to march higher, mirroring support in EGBs (see 0754ET bullet), otherwise no substantive headline or Block driver.
- Tsy Mar'25 10Y contract trades 108-25 last (+11) puts it back to last Monday's early range, 10y yield declining .0545 at 4.5709%.
- Curves remain mixed, 2s10s -.050 at 28.792, 5s30s +1.967 at 37.374.
STIR: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.46% (-0.07), volume: $2.275T
- Broad General Collateral Rate (BGCR): 4.45% (-0.05), volume: $840B
- Tri-Party General Collateral Rate (TGCR): 4.45% (-0.05), volume: $803B
- (rate, volume levels reflect prior session)
EQUITIES: Futures Through the Friday Lows as Megacaps Underperform Pre-Market
US futures now through the Friday lows as volumes and participation pick up at the NY crossover. Move lower for stocks is coming alongside a fresh daily low in the US 10yr yield - this is the inverse of the price action we noted into the Friday close, which saw the e-mini S&P drop ~80 points as the US 10y yield added ~5bps.
- An early underperformer amid single stocks had been Boeing - which traded lower by as much as 9% in pre-market trade this morning - but has since trimmed the losses to around 2%. Megacap names are underperforming ahead of the bell (as had been the case last week): Tesla lower by 1.9%, NVidia -0.9%, Apple -0.8%, Meta -0.8%.
- Today's marks one of the last full session of the year for equity markets - so rebalancing flows could prove dominant, estimates of which vary but some notable names see over $20bln of US equities to be sold from US pension funds in order to rebalance against the December price action - a sizeable flow when compared to historicals.
