EM LATAM CREDIT: Argentina Jan. CPI, (ARGENT; Caa3pos/CCC/CCC)
"ARGENTINA JAN. CONSUMER PRICES RISE 2.2% M/M; EST. +2.30%
"ARGENTINA JAN. CONSUMER PRICES RISE 84.5% Y/Y; EST. +84.70%" - BBG
Positive for Bonds
• After a breathtaking 60% gain from August to December 2024, ARGENT 2035s stabilized in a trading range of $65-69, last quoted $65.75. Argentina January CPI better than expected 2.2% m/m, 84.5% y/y versus last month 2.7% and 117.8%.
• Further improvement in inflation should help the country get a new IMF program as well as maintain a stable FX rate, improve confidence in the government’s policies, and allow the government to lower local rates which could stimulate demand to hold pesos.
• Ultimately it brings the government closer to lifting capital controls which would stimulate investment both foreign and domestic as well as allow the country access to the international debt market which would bolster reserves.
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US STOCKS: Late Equities Roundup: Second Half Recovery, Banks Up Ahead Earnings
- Stocks have recovered from midday lows and are making moderate gains in late trade - still off this morning's post-data knee-jerk highs as accounts square risk and migrate to the sidelines ahead of Wednesday's key CPI inflation data.
- Currently, the DJIA trades up 206.18 points (0.49%) at 42504.32, S&P E-Minis up 20 points (0.34%) at 5894, Nasdaq up 46.2 points (0.2%) at 19133.11.
- Utilities continue to outperform while Financial sector shares have gained momentum in the second half. Independent power and electricity providers rebounded after Monday's selling: Vistra +4.91%, Constellation Energy +3.09%, NRG Energy +2.42%.
- Banks and financial services shares led gainers in the second half - taking some risk with banks kicking off the latest earnings cycle tomorrow: Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, followed by M&T Bank, US Bancorp, Morgan Stanley and PNC on Thursday.
- Leading gainers included Citizens Financial +3.74%, Huntington Bancshares +2.81, Fifth Third +2.8% and Discover Financial Services +2.64%.
- On the flipside, Health Care and Communication Services continued to underperform in late trade. Pharmaceuticals weighed on the Health Care sector: Eli Lilly -6.5% after phase 1 trials of it's weight loss drug were terminated, Charles River Labs -5.35%, Biogen -3.64% and Moderna -2.87%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Meta -1.83% amid reports of staff reductions of lowest 5% performers, Netflix -0.62%, Alphabet -0.32%.
US TSY OPTIONS: UPDATE: Large Mar'25 10Y Call Buy Update
- over +128,600 TYH5 108.5 calls on the day from 27 to 29 vs. futures from 107-08.5 to -11 on an appr 0.30% delta
US: FED Reverse Repo Operation
RRP usage retreats to $160.219B this afternoon from $183.669B on Monday. Compares to $98.356B on Friday, December 20 - the lowest level since mid-April 2021. The number of counterparties rises to 59 from 51.
