LATAM WRAP-LatAm debt advances following positive inflow data
By Paul Kilby
NEW YORK, Oct 16 (IFR) - LatAm credits were catching a bid on Friday after JP Morgan upgraded EM corporate credits to neutral from underweight and EM debt funds saw their first inflows in 11 weeks.
"We have seen a bunch of buyers of Chilean and Colombian credits," said a New York based trader. "Everything non-Brazil has been better bid."
The long-end of Chilean copper giant Codelco's curve was better bid as shorts were squeezed, with the 2044s trading about 5bp tighter at 285bp-275bp.
That combined with a broader equity rally on Friday amid heightened expectations of a delay in US monetary tightening has helped improved the tone in EM.
"The flood of negative headlines looks to have been reflected in the sell-off over the past months, while expectation of more accommodative central bank policy is helping sentiment," wrote JP Morgan analysts on Thursday.
The US bank turned neutral on EM corporates on Thursday after having kept the asset class on underweight for the last five months. As justification for the move, it cited supportive technicals, loose monetary policy and improving sentiment.
Even prices in Brazil's bond market, which have been whipsawed in recent days, was finding some support.
The country's five-year CDS was being quoted at 430bp on Friday morning, or 17bp tighter on the day, while the sovereign's 2025s were inching higher at 89.50-90.00. Petrobras 2024s were about a point higher at 89.50-90.00. Continuación...