Powell was accommodative in his comments at Jackson Hole, opening up the possibility of a 25bps cut in September which sent the market into euphoria, leading to a rally of almost 2% in equities and an advance across the treasury curve, particularly short bonds which fell 10bps in yields (-4bps for longs), on an increase in the probability of the -25bps to 90% extrapolated in futures, for now assuming also the second cut in December. In commodities, metals rose 1-2% as did agriculture, while energy was mostly flat.

Venezuela and PDVSA remain in demand, with PDVSA's bonds approaching their highest since March in the face of pressure from the US, which said today that it will not grant licenses to non-US oil companies to operate in the country for the time being.

 

Latin American credits rose 0.1-0.25pts, helped by the advance of treasuries.