EM LATAM CREDIT: United Mexican States (MEX; Baa2neg/BBB/BBB-) Copper Production
“Mexico Jan. Copper Production Falls to 20,923 MT” – BBG
Neutral for spreads
• Mexico January copper production fell to 20,923MT from 41,910 metric tons in December, according to the National Institute of Statistics, Geography, and Informatics (INEGI), but was up 42% Y/Y. Mining and metallurgical production overall was down 10.2% for the month but was up 14% Y/Y.
• Mexico silver and gold production fell as well with January silver production dropping to 344,957 kilograms from 356,693 kilograms in December while gold production was down to 6,482 kilograms from 6,553 kilograms in December
• Copper prices have hit record highs recently as the US considers tariffs on imports.
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EGBS: 10-year BTP/Bund Spread Off Highs As Equities Find A Base
The 10-year BTP/Bund spread has moved away from intraday highs as European equities find a short-term base, but remains 2.5bps wider at 108bps.
- This morning’s equity-led spread widening was exacerbated by ECB Executive Board member Schnabel’s hawkish interview with the FT (even as Schnabel’s comments were in line with her usual stance).
- The spread briefly marked below 104bps yesterday. The prospect of increased joint EU issuance to fund defence spending may have contributed to Monday/Tuesday’s tightening, alongside broader German fiscal risks ahead of Sunday’s election.
- MNI’s German election preview is here.
EUROZONE DATA: Flash Vacancy Rate Steady At 2.5% In Q4
The Eurozone seasonally adjusted flash Q4 vacancy rate was 2.5%, unchanged across the last six quarters and down from a peak of 3.3% in Q2 2022. This suggests little scope for further easing of labour market conditions on the demand side, with further loosening (if any) likely to come via the unemployment rate. Unemployment remains close to historical lows at 6.3% as of December.
- The EC’s expected employment index ticked up to 98.8 in January (vs 97.2 prior), but remains below the 2000-2019 average of 99.5.
- Meanwhile, Eurozone business economy flash Q4 labour costs - also released today - eased to 4.1% Y/Y (vs 4.6% prior) for the lowest since Q3 2022. This is consistent with the ECB’s expectations for decelerating compensation growth, which should eventually feed through into services inflation.
- However, we caveat that Eurostat has to estimate multiple components (e.g. compensation, hours worked) using partial/preliminary data from member states to calculate the flash labour cost data, which makes it prone to revisions in the final release.
EGB SYNDICATION: 15-year SlovGB: Final terms
- Size: E3bln (MNI expected E2.5-3.5bln)
- Books closed (pre-rec) in excess of E9bln (incl. E460mln JLM interest)
- Spread set earlier at MS+130bps (guidance was MS + 140bps area)
- Maturity: 27 February 2040
- Settlement: 27 February 2025 (T+6)
- ISIN: SK4000026845
- Bookrunners: HSBC (DM/B&D) / JPM / Slovenska sporitelna (Erste Group) / Tatra banka (RBI Group)
- Timing: Books closed at 12:00GMT / 13:00CET, allocations and pricing to follow
