LATAM WRAP-Brazilian bonds bounce back on improved sentiment
By Paul Kilby
NEW YORK, Oct 22 (IFR) - Brazilian credits were making a comeback on Thursday as positive investor sentiment spurred by the prospects of more monetary easing in Europe spilled over into LatAm credit markets.
Brazilian bonds prices were largely inching up as they followed the more substantial rally in the country's equity market, where the Ibovespa index was up about 1.59%.
Fixed-income investors largely shrugged off weak quarterly results at Brazilian miner Vale, which suffered a net loss of US$2.1bn in the third quarter due to depressed commodity prices and a weak Real.
"They are lowering their costs and leverage," said a New York based trader, explaining the resiliency of the company's bond prices. "They are doing a good job in mitigating losses."
The company's curve was 1-2bp tighter earlier in the session, with the 2022s and 2042s being respectively quoted at 413bp-403bp and 543bp-533bp.
The Brazilian sovereign was also taking back losses on Thursday despite news about further slippage in the government's fiscal targets.
The sovereign's 2025s were up close to a point on Thursday to trade at mid-market price of 87.50, according to Thomson Reuters data.
"Economic news in Brazil is irrelevant," said Klaus Spielkamp, head of fixed-income sales at Bulltick. "People are waiting on the development of the impeachment (process). It is all political." Continuación...