LATAM WRAP-LatAm strikes bullish tone on up day
By Paul Kilby
NEW YORK, Oct 30 (IFR) - LatAm credits continued to find support on Friday as crude prices rose and weak consumer spending data raised doubts about the Fed's willingness to hike rates in December.
While EM debt funds suffered another week of outflows, substantial inflows into US high-yield bond funds were seen as an indicator of improving risk sentiment.
"Accounts are more constructive around emerging markets and you saw a huge inflow into high-yield, which normally benefits us," said a trader of EM bonds.
In Brazil, corporates were largely outperforming the sovereign, with bonds issued by state-controlled Petrobras up between a quarter to half a point.
The company's 2024s were trading above 80 cents on the dollar for the first time in over a month, quoted on Friday at 80.25-81.00.
"We are seeing investors selling sovereign debt to buy corporates, which is generally a bullish trade," said the trader.
Still, many Latin American corporates are having to contend with the fallout from weaker currencies and the impact it has had on their debt levels.
This includes Brazilian steelmaker Gerdau, which plans to raise R$1.24bn (US$319m) through an equity sale designed to pay down debt. Continuación...