LATAM: Colombia, Mexico Swaps Curve Shift Lower Amid Mounting Growth Pressures
Apr-22 17:42
- Colombian IBR swap rates have rallied by as much as 13bp in the belly and long end today, amid a bounce in oil prices and firmer risk sentiment, buoyed by optimism of a de-escalation in US-China trade tensions. The move also follows a moderate downside surprise for Feb economic activity yesterday, which increases prospects for a BanRep rate cut next week.
- As noted, President Petro has reiterated calls for the central bank to cut rates to support growth, and the recent BanRep analyst survey suggested that analysts lean towards a 25bp cut on April 30. The decision will be a close call however, given BanRep’s cautious stance, and the timelier Bloomberg survey currently leans towards no change next week.
- Elsewhere, the BCCh also holds its latest monetary policy meeting next week when a further rate hold is expected, according to the recent central bank economist survey. However, analysts now see scope for 50bp of easing by year-end as growth concerns increase. Chile camara swap rates have ticked lower today, but remain up to 10bp higher at the long-end over the last week.
- Meanwhile, Mexican TIIE-F swap rates have rallied by 5-7bp at the long-end amid mounting growth concerns, with the IMF now expecting the economy to shrink by 0.3% this year. The latest Citi analyst survey will be released shortly, which has continued to show expectations for another 50bp Banxico rate cut next month.
- Brazil DI swap rates have underperformed today, with long-end yields rising by 5-15bp as BCB Governor continues to sounds cautious about inflation risks amid expectations that the BCB will continue to hike rates next month, albeit at a slower pace.
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CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
Mar-23 11:22
- CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CARNEY EXPECTED TO SEEK ELECTION
US TSYS: Available "Extraordinary Measures" Pick Up Slightly From Lows
Mar-21 21:00
Treasury has $163B of "extraordinary measures" remaining for authorities to use to fend off hitting the debt limit as of March 19, per the latest release of Treasury data. That's up from $86B on Mar 17 and a low of $34B on Feb 24.
- That's a little under half of the $377B in measures available to Treasury, with most of the amount remaining ($143B) coming from the so-called "G Fund".
- This headroom is in addition to $416B in cash left in the TGA, at last count.
- We haven't seen any changes recently to "x-dates" by when Treasury will run out of cash until the debt limit is lifted.
- Consensus still centers around late July/early August, but much will depend on April's major mid-month tax take. Treasury wrote to Congress last week that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
USDCAD TECHS: Short-Term Outlook Remains Bullish
Mar-21 21:00
- RES 4: 1.4793 High Feb 3 and key resistance
- RES 3: 1.4700 Round number resistance
- RES 2: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 1: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- PRICE: 1.4345 @ 16:27 GMT Mar 21
- SUP 1: 1.4242 Low Mar 6 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD is trading closer to its recent lows. The bull cycle that started Feb 14 remains intact and moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Note that the latest pullback has exposed a near-term key support at 1.4242, the Mar 6 low. Clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. The bull trigger is 1.4543, the Mar 4 high.
