EM CEEMEA CREDIT: MNI EM Credit market update CEEMEA (Apr 24)
Apr-24 15:21
- In Rates, we get to end of day with UST 10Y yields at 4.33%, a -5bp move little changed from earlier update. The 5s/10s curve shows at 37.53, +2bp.
- In Credit Sovereign, spread moves show a small widening bias. Ukraine’s Feb35s chart +34bp. S&P changed outlook to neg on Bahrain aft-mkt close y’day, 36s show +3bp no meaningful spread reaction. Fitch rates Kyrgyz Rep at mid single-B in anticipation of bond issuance. We see impact from Pakistan’s trade cessation with India as manageable short term.
- Among Corporates, spread moves have been muted. Primary remains open with UAE’s real estate Omniyat (-/BB-/BB-) mandating for a USD 3Y bench in Green & Sukuk format. Rich news flow, with Zambia’s First Quantum reporting 1Q25 (neutral, https://mni.marketnews.com/3EndXWd), South Africa’s Gold Fields looking at 12-month lease for Damang (neutral, https://mni.marketnews.com/4izk0F9). Hungary’s MOL Group CEO sees no major potential acquisition (neutral). Saudi’s SIB and UAE’s DIB both reported Q1 interim (neutral). Namibia’s offshore sees oil discovery under scope for Azule Energy’s JV (Rhino Resources). South Africa’s utility Eskom announced recourse to Stage 2 loadshedding (neutral).
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GBP: Retracement Mode in EURGBP Remains in Play
Mar-25 15:20
- A retracement mode in EURGBP remains in play as attention for the cross remains on the 50-day EMA, at 0.8351. The average marks a key short-term pivot level and has been pierced. A clear break of it would undermine the recent bull theme and signal scope for a deeper pullback, towards 0.8321, a Fibonacci retracement.
- Overall, levels between 0.8300-0.8200 continue to represent the base of a longer-term range, as indicated below. Key resistance and the bull trigger are located at 0.8450, the Mar 11 high.
STIR: April ECB Pricing Unfazed By Cautious Speakers
Mar-25 15:16
April ECB implied rates have been unfazed by today’s cautious/hawkish leaning Governing Council speakers, with ESTR OIS continuing to price just over a ~65% implied probability of a 25bp cut.
- Both Kazimir and Muller suggested the ECB’s deposit rate was no longer in restrictive territory, evidently not subscribing to ECB staff’s (heavily caveated) 1.75-2.25% nominal neutral range.
- Both speakers (alongside GC colleague Vujcic) noted that the April decision remains an open question.
- February lending data is due on Thursday, before the March flash inflation round kicks off with Spain and France on Friday. Expect the majority of speakers to display a non-committal tone until next Tuesday at the earliest, following the Eurozone-wide inflation print and US President Trump’s next wave of tariff announcements.
- With the exception of the April meeting, OIS-implied rates are higher on the day, tracking similar movements in Euribor implied yields and core EGBs.
OPTIONS: Expiries for Mar26 NY cut 1000ET (Source DTCC)
Mar-25 15:16
- EUR/USD: $1.0690(E912mln), $1.0775-90(E766mln), $1.0900-25(E2.3bln)
- USD/JPY: Y148.00-10($932mln), Y151.74($519mln), Y152.00($955mln)
- AUD/USD: $0.6370-80(A$699mln)
- USD/CAD: C$1.4200($556mln), C$1.4240($634mln), C$1.4500($781mln)
- USD/CNY: Cny7.2430($600mln), Cny7.3000($500mln)
