EM LATAM CREDIT: ARGENTINA: Pause In Disinflation Process Seen In February
February CPI inflation data are due tomorrow, with consensus for the monthly rate to remain steady at 2.3% m/m (vs. 2.2% in January). In annual terms, headline inflation is seen slowing to 66.8% y/y, from 84.5% the month before. Upside pressure is expected to come from the food component, where inflation is likely have accelerated last month. By contrast, core inflation may have moderated from January’s 2.4% m/m pace.
- JP Morgan expects February CPI inflation to print at 2.5% m/m, largely due to meat prices, which they see contributing 70bp. Meanwhile, HSBC also sees a pause in disinflationary progress with the headline rate remaining above 2%. They expect inflation prints to remain in focus leading up to the mid-term elections in October.
- The BCRA survey earlier this week revealed that analysts expect both headline and core inflation to average 1.8% m/m between February and August, falling to 1.5% m/m by the end of that period. Headline inflation is seen ending this year at 23.3% y/y, and core at 23.1% y/y.
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PIPELINE: Corporate Bond Issuance Update $1.75B Zimmer Biomet 3Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 02/11 $5B #Israel $2.5B 5Y +120, $2.5B 10Y +135
- 02/11 $1.75B #Zimmer Biomet $600M 2Y +45, $550M 5Y +72, $600M 10Y +97
- 02/11 $1.25B #Tennessee Valley Authority 30Y +60
- 02/11 $1B Snap Inc 8NC3 7%
- 02/11 $800M #Flowers Food 10Y +125, 30Y +150
US: FED Reverse Repo Operation
RRP usage falls to new low at $76.446B this afternoon from Monday's $99.653B - compares to prior low of $78.788B last week Wednesday, the lowest level since mid-April 2021. The number of counterparties falls to 36 from 41 prior.
GBPUSD TECHS: Trading Below Last Week’s High
- RES 4: 1.2667 High Dec 19
- RES 3: 1.2610 38.2% retracement of the Sep 26 ‘24 - Jan 13 bear leg
- RES 2: 1.2576 High Jan 7
- RES 1: 1.2550 High Feb 5
- PRICE: 1.2420 @ 16:10 GMT Feb 11
- SUP 1: 1.2333/2249 Low Feb 11 / Jan 3
- SUP 2: 1.2161 Low Jan 17 / 20
- SUP 3: 1.2100 Low Jan 10 and the bear trigger
- SUP 4: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing
GBPUSD has improved off lows, but remains well below the Feb 5 high. The pair has recently traded above the 20- and 50-day EMAs, and pierced 1.2523, the Jan 27 high. A resumption of gains would signal scope for a move towards 1.2610, a Fibonacci retracement. On the downside, key short-term support to watch has been defined at 1.2249, the Jan 3 low. Clearance of this level would instead highlight a reversal and strengthen a bearish threat.
