LATAM WRAP-LatAm rebounds on expectations of rate hike delays
By Paul Kilby
NEW YORK, Oct 2 (IFR) - The prospects of a delay in US rate hikes spurred buying across LatAm credit markets on Friday after US payroll data came in lower than expected.
The market initially took a knee-jerk tumble as the weak employment number raised doubts about the strength of the US economy and fueled fears about global growth, and in turn commodity prices.
But bond prices were quick to rebound on expectations that the Fed is now unlikely to tighten monetary policy until next year, possibly opening a window for borrowers sitting on the sidelines.
"We have seen nothing but customer buying on all things LatAm," said a New York-based trader. "Now that a Fed hike is off the table (for the immediate future) that is one less thing to worry about."
EM dedicated buyers were quickly followed by real money accounts who took the opportunity to add exposure to LatAm, though only among defensive names.
Chilean telco Entel, Colombian quasi sovereign utility EEB and Mexican tortilla manufacturer Gruma were all being lifted late morning. Gruma's 2024s were up about 75ct at 105.00, while EEB's 2021s were about 3/8s of a point stronger at 103.50.
Bonds issued by Mexico telco Axtel have also rallied about 10 points on news that conglomerate Alfa would buy a majority stake in the company.
Axtel 2020s were being quoted early afternoon at 101.50-103.50 after closing yesterday at 92, according to another trader. Continuación...