LatAm credit markets end wider against shaky backdrop
By Paul Kilby
NEW YORK, May 28 (IFR) - Weaker equities, currencies and crude prices made for a shaky backdrop in Latin America's credit markets on Thursday as investors to took profits and sent spreads wider.
Traders have been reporting the emergence of a few bottom fishers as prices become cheaper, but overall the buyside remain wary of deteriorating fundamentals amid weaker commodity prices.
Risk appetite was on the wane Thursday amid ongoing worries about the outcome of Greek debt negotiations and a sharp drop in Chinese stock prices earlier in the day.
And with US Treasuries holding steady - the yield on the 10-year bond was essentially flat at around 2.13% - spreads are trending wider as debt prices fall.
"We have been weak all week and there has been a lot of profit taking," said a New York based trader who thought the market had been overbought.
Brazilian oil company Petrobras's 2024s were some 8bp wider at 420bp-410bp, while miner Vale 2022s were weaker by about 5bp at 255bp-245bp.
Crude ended higher on Thursday but trading was choppy as the dollar made further gains and local currencies such as the Brazilian Real suffered further losses.
The Real was back up at 3.16 against the dollar Thursday, while the sovereign's 2025s were also weaker at a mid-market price of 98.75. Continuación...