NEW YORK, May 8 (IFR) - Latin American debt markets were holding steady Friday following a US jobs number that came in line with expectations and further inflows into emerging market debt funds this week.
Sovereign debt prices were inching higher as yields on the 10-year US Treasury fell to around 2.11% after non-farm payroll data came in at 223,000 new jobs, just shy of expectations.
Brazil 2025s were back at a mid-market price of 99.20, up about 60 cents on the day, according to Thomson Reuters data.
Spreads on bonds issued by Brazilian state-controlled oil company Petrobras were largely flat, with the 2024s quoted at 415bp-410bp.
Crude prices were also climbing, providing some support to oil names throughout the region and including Venezuela, where the 2022s were trading at 56.75-57.75.
With uncertainty over US jobs out of the way, bankers expect a pick-up in primary activity next week as borrowers seek to print before a possible hike in US rates later this year.
Meanwhile technicals remain strong for a region that has seen little supply this year but continues to enjoy inflows into the asset class.
“Demand is strong and investors have money to put to work,” said a syndicate official.
“We have seen that, even into the rates sell-off this week, spreads continued to tighten in Latin America. With so little supply this year, guys aren’t running for the hills.”
For the week ended May 6, EM dedicated bond funds enjoyed another US$574.66m of inflows, according to UniCredit, citing EPFR data.
Local currency funds took in US$354.36m, the largest amount since June 2014, while hard currency and blended funds respectively absorbed US$93.61m and US$126.68m.
Against that backdrop, recently minted new issues continue to advance, albeit not dramatically so. Mexican Tequila maker Jose Cuervo’s new 10-year bond was being quoted at 165bp-162bp after pricing at 165bp earlier in the week.
Votorantim Cimentos’s EUR500m 2022 was also being quoted higher at 100.00-100.25 versus a reoffer of around 98.542. (Reporting By Paul Kilby)