Slow start for LatAm despite oil price jump
By Paul Kilby
NEW YORK, March 26 (IFR) - Latin American credits were off to a lackluster start Thursday despite an uptick in crude prices, with names largely drifting lower amid a softer tone in the broader market.
Global stocks were weaker but oil surged after Saudi Arabia launched airstrikes in Yemen, pushing Brent up US$3 to around US$60 a barrel and providing some support to the oil-rich region.
"The fact that oil prices are up helps (Latin America)," said a syndicate manager. "That US rates are within 2% on the 10-year is also driving people into better-yielding credits."
But with investors uncertain about the direction of US Treasury yields ahead of the release of fourth-quarter GDP figures Friday, the general mood was cautious.
"It looks like the market is trying to go lower, but there aren't a lot of aggressive offers," said Rodrigo Covian, head of fixed-income at Bulltick.
After an active day Wednesday, Brazilian credits were taking a breather but remained well supported after a decent rally this week.
But Brazil's Petrobras's curve was some 10bp wider early in the session, with the 2024s and 2044s being quoted at 540bp-535bp and 545bp-535bp, respectively.
Bonds issued by the state-owned oil entity suffered price swings yesterday but ended the day tighter after buyers were seen returning to the credit on news that regulators had agreed on how Petrobras would calculate corruption losses. Continuación...