Treasuries, crude weigh on LatAm credit markets
By Paul Kilby
NEW YORK, Feb 10 (IFR) - The back-up in US rates along with weaker crude oil prices were weighing on Latin American credit markets Tuesday morning, leaving newly minted issues struggling to gain momentum.
Traders reported some selling on the back of the weaker US Treasury market, where yields on the 10-year topped 2% for the first time in about a month before receding to 1.98%.
Prices on new bonds such as Chilean retailer Cencosud's 10s and 30s continue to hover around re-offer levels, and low-beta sovereigns are also fighting an uphill battle.
"A lot of these guys didn't hedge their rate exposure and we have seen a 37bp back-up in rates," said a New York-based trader.
Mexico's 2044s are down a good point at 103.375-103.875 this morning, while Brazil 2025s have followed a similar downward trajectory to hit 97.50-98.00.
Troubled Brazilian oil giant Petrobras was bucking the trend - despite the volatility of crude prices - as its bond prices inched tighter on Tuesday morning.
This came after local newspaper Folha de Sao Paulo reported that newly selected company president Aldemir Bendine was planning a call with local and international investors.
Bendine may provide some clues as to how newly installed management will address a corruption scandal that could results in billions of dollars in write-downs. Continuación...