EM LATAM CREDIT: Mex Central Bank Might Cut 50bps More in the Future

• RES 4: 111-20+ High 6 and the bull trigger 
• RES 3: 110-25   High Dec 12   
• RES 2: 110-06+ 50-day EMA  
• RES 1: 109-08   20-day EMA
• PRICE:‌‌ 108-03+ @ 18:55 GMT Jan 07
• SUP 1: 108-01+ Intraday low 
• SUP 2: 108-00   1.500 proj of the Oct 1 - 14 - 16 price swing   
• SUP 3: 107-19+ 1.618 proj of the Oct 1 - 14 - 16 price swing
• SUP 4: 107-04   1.764 proj of the Oct 1 - 14 - 16 price swing

The trend condition in Treasury futures is unchanged and remains bearish. Today’s fresh cycle low confirms a resumption of the downtrend and the contract is approaching the next objective at 108-00, a Fibonacci projection. Note too that moving average studies remain in a bear-mode position highlighting a dominant downtrend. Key short-term resistance is seen at 109-08, the 20-day EMA.

• RES 4: 1.0825 High Nov 7 
• RES 3: 1.0630 High Dec 06
• RES 2: 1.0537 50-day EMA 
• RES 1: 1.0437/58 High Jan 6 / High Dec 30 
• PRICE: 1.0354 @ 18:58 GMT Jan 7
• SUP 1: 1.0226 Low Jan 2
• SUP 2: 1.0209 3.0% Lower Bollinger Band
• SUP 3: 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg 
• SUP 4: 1.0166 2.0% 10-dma envelope  

The trend condition in EURUSD remains bearish and recent gains appear corrective. The Jan 2 sharp sell-off reinforces current conditions and note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0412, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The bear trigger has been defined at 1.0226, the Jan 2 low.

At least $27B corporate bonds have either priced or launched so far today, less than half of Monday's near $60B record. Still waiting for Kexim, SMFG and Daimler Truck NA details.

• Date $MM Issuer (Priced *, Launch #)
• 01/07 $6B *European Investment Bank (EIB) 5Y SOFR+42
• 01/07 $5B *ADB 3Y SOFR+31
• 01/07 $3.55B #BPCE $1.25B 6NC5 +142, $1.5B 11NC10 +162, $800M 21NC20 +195
• 01/07 $2B #Santander $1B 5Y +110, $1B 10Y +135
• 01/07 $2B #Dai-Ichi Life PerpNC10 6.2%
• 01/07 $1.6B #Republic of Chile 12Y +105
• 01/07 $1.5B #CIBC 5Y SOFR+71
• 01/07 $1.25B #HPS Corp Lending $750M 3Y +135, $500M +7Y +165
• 01/07 $1B #GA Global Funding $500M 5Y +97, $500M 10Y +127
• 01/07 $1b #Kuwait Finance House (KFH) 5Y SOFR Sukuk +95
• 01/07 $850M #APA Corp $350M 10Y +150, $500M 30Y +185
• 01/07 $600M #Met Tower 3Y +48
• 01/07 $500M #Boston Gas WNG 10Y +115
• 01/07 $500M #Protective Life 7& +85
• 01/07 $500M DBJ WNG 10Y SOFR+73
• 01/07 $Benchmark World Bank 7Y +54
• 01/07 $Benchmark Kexim 3Y +55a, 3Y SOFR, 5Y +75a, 10Y +90a
• 01/07 $Benchmark SMFG 5.25Y +78, 5.25Y SOFR+105, 7Y +88, 10Y +95
• 01/07 $Benchmark Daimler Truck Fin NA 3Y +65, 3Y SOFR, 5Y +82, 7Y +92, 10Y +102
• Expected Wednesday:
  • 01/08 $Benchmark Kommunalbanken 5Y +51
  • 01/08 $Benchmark Cncl of Europe Dev Bank 5Y SOFR+45a
  • 01/08 $Benchmark Inter-American Development Bank (IADB) 5Y SOFR+45a