LatAm credits end lower, as oil slide hurts Ecuador
By Davide Scigliuzzo
NEW YORK, March 17 (IFR) - Latin American credit markets ended another volatile session on a back foot on Tuesday. Buying appetite returned late afternoon but only to select credits.
"The market was pretty weak for most of the day," said a corporate bond trader in New York. "Now a few people are cherry picking names that had cheapened too much."
A rebound in US equities and US high-yield in the afternoon also helped improved sentiment, while in Brazil the Real closed stronger for the first time in a week.
"(US) high-yield started to turn around midday but it took a while to see that (spill over) into emerging markets," said the trader.
Brazilian five-year credit default swaps ended the day 5bp tighter at 305bp mid-market after widening to as high as 320 earlier in the day.
Bonds of state-owned oil company Petrobras also bounced back from wides to close 5bp to 30bp weaker. The 2024s and 2044s, for example, ended the day at spreads of 605bp-595bp and 585bp-575bp respectively.
"Some of it was short covering, but the fact that the Brazilian Real for once is not closing lower also helped," said a second corporate bond trader in New York.
After widening by between 6bp and 12bp earlier in the day, bonds issued by Brazilian miner Vale also recovered from their lows, with the 2022s spotted at 330bp-325bp, or 5bp wider on the day. Continuación...