LATAM WRAP-Brazil outperforms on impeachment proceedings

jueves 3 de diciembre de 2015 13:36 GYT

By Paul Kilby

NEW YORK, Dec 3 (IFR) - Brazil was outperforming on Thursday as the market found some hope in impeachment proceedings against the country's president while LatAm debt prices largely tracked US Treasuries lower.

Brazilian credits trimmed some gains but were still largely stronger on the day, as investors grew more optimistic about a possible change of government despite the complications of impeachment proceedings against President Dilma Rousseff.

"The market had priced in that the government would keep spending and forget about any austerity plans," said a trader. "Since there is a possibility that Dilma won't be there anymore, the scenario looks better."

Brazil five-year CDS tightened about 10bp to around 438bp-448bp early Thursday only to widen out to about 444bp-450bp.

The 2024s issued by oil company Petrobras were about a quarter point higher at 77.75-78.75, while miner Vale was about 5-10bp tighter with the 2022s trading at 595bp-585bp.

However, traders saw little momentum behind Thursday's brief rally given the uncertainty over the length of the impeachment process or whether the president would leave at all.

"Things rallied but we are not seeing any follow through," said a second trader. "There is no meaningful flow to substantiate the rally."

BTG Pactual bonds continued to slump, however, following the arrest and resignation of its CEO.   Continuación...