EM LATAM CREDIT: Argentina Reserves Not Increasing Despite BCRA Buying USD

Tesoro Publico has announced it will be looking to sell a combined E5-6bln of the following Bono/Oblis at its auction this Thursday, January 16:

• the 2.70% Jan-30 Bono (ISIN: ES0000012O00)
• the 0.85% Jul-37 Obli (ISIN: ES0000012I24)
• the 1.00% Oct-50 Obli (ISIN: ES0000012G00)

Tesoro Publico has also announced it will be looking to sell a combined E2-3bln of the following letras at its auction tomorrow, January 14:

• the 3-month Apr 11, 2025 letras
• the 9-month Oct 10, 2025 letras

• This week, we are most focused on external MPC member Professor Alan Taylor’s inaugural speech as an MPC member on Wednesday at 16:30GMT entitled “Inflation Dynamics and Outlook” which he will deliver at the Leeds University Business School on Wednesday.
• His main public comments so far have come from his appearance at the Treasury Select Committee (TSC) on 19 November. Since then he was joined by both Dhingra and Ramsden to dovishly dissent in favour of a 25bp cut at the December MPC meeting.
• In his November TSC comments he noted that “gradual” to him was aligned to the market (at the time the MPR forecasts were made) which implied about 100bp of cuts over 2025 while he said "my own views are skewed to the downside risks rather than the upside risks of a year ago, then we'd be going faster."
• Given the market moves since the MPR forecasts, it will be interesting to see whether Taylor explicitly addresses the change in market prices.
• The views of the three dissenters in the December MPC Minutes described the “sluggish demand and a weakening labour market, now and in the year ahead, both of which would see further downward pressure on demand, wages, and prices.” And noted that “Given the evolving balance of risks, a less restrictive policy rate was warranted” in the view of the three dissenting members.
• We are also due to hear again from Breeden tomorrow at 8:30GMT, but as is the case with the majority of her speeches, there is unlikely to be much on monpol here. She is giving the keynote speech at the Financial Stability Law Forum’s ‘Financial stability and too big too fail’ symposium in Zurich.

• Some unwind off the lows in Bonds futures throughout the early European and into the US session.
• Both Yields noted for Germany and the US Tnotes have held today, this equated to 130.50 support in Bund and 107.04+ for US TYH5.
• There's a notable pick up in Volume on the way back up, but nothing fast, more of a gradual move.
• All order flow related, TYA was bought in 6k, FVA 3k, USA 2k, and on this side of the Pond, BTP in 3k, and Gilt 1k.
• Resistance in Bund moves down to 131.37 initially.