EM LATAM CREDIT: Republic of Bolivia (BOLIVI; Caa3/CCC+/CCC-) August Election
“The opposition bloc in Bolivia is reorganizing five months before the elections.” – Infobae
Positive for spreads
• Bolivia’s opposition is uniting against the political party that has ruled the country for the past twenty years, the Movement Toward Socialism (MAS). BOLIVI 2030 bonds ended 2024 at USD62, closed Feb. 2025 at USD64 and last quoted USD68.5 as the market anticipated political change.
• Vincente Cuellar just dropped out of the race. He will support another opposition candidate Doria Medina as consolidation continues. Two out of four main opposition candidates are former presidents. The opposition proposes conducting a poll to decide who shall be the party candidate.
• A split opposition may have been what allowed the MAS party to win in past elections. In December 2024 an agreement was reached to unite behind a single candidate for the August Presidential election.
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OPTIONS: Call Condor Buying In Decent Size Monday
Monday's Europe rates/bond options flow included:
- OEH5 117.25/118.25 RR, bought the call for 4.5 in 4k.
- RK5/ERM5 98.0625/98.3125cs spread, bought for 0.25 in 4k.
- ERK5/ERM5 98.0625c calendar, bought for 0.75 in 10k.
- ERK5 97.875/97.9375/98.00/98.0625c condor, bought for 1.5 in 4k
- ERM5 97.875/97.9375/98.00/98.0625c condor, bought for 1.5 in 2.5k.
- ERM5 97.9375/98.00/98.0625c fly vs 97.50p, bought the fly for flat in 10k.
- SFIM5 95.95/96.05/96.15/96.25c condor, bought for 2.5 and 2.75 in 28k total.
US TSY OPTIONS: April'25 10Y Vol Sale
- -6,000 TYJ5 108/111 strangles, 39, appr implied vol 5.94%
FOREX: USD Index Holds Moderate Advance, JPY Remains Volatile
- The USD index is holding onto 0.2% gains on Monday, as the initial reaction to a Trump announcement of tariffs on steel and aluminium bolstered the greenback. Aside from the Japanese yen, G10 currency ranges have remained subdued as markets await the key US CPI data due on Wednesday.
- The Japanese Yen traded in a relatively volatile manner and remains weaker on Monday. USDJPY briefly extended its recovery from Friday’s lows to around 150 pips, printing a 152.54 session high during the European session. Overall, this recovery for Cross/JPY appeared to be very much a correction to the broader developing theme we saw last week, and across the US session these moves did reverse.
- USDJPY backtracked across US hours alongside a broader bid in core FI on light volumes. As such, the pair trades around 151.75 as we approach the APAC crossover. Renewed weakness would keep the focus on 150.93, the Feb 07 low, a break of which would open up 149.69, the Dec 9 low. In similar vein, EURJPY resides around 90 pips off the session highs of 157.42.
- EURUSD printed a 1.0280 low overnight and moving average studies remain in a bear-mode position, highlighting a dominant downtrend. 1.0272, the Feb 04 low is the immediate support level of note.
- In emerging markets, USDMXN is on the front foot as tariff concerns continue to linger. The pair is 0.53% higher at 20.67, with the pair edging closer to the mid-week highs from last week around 20.71.
- Speeches from BOE’s Mann and Governor Bailey will headline the Tuesday calendar, before Fed Chair Powell is due to deliver testimony on the Semiannual Monetary Policy Report to Congress.
