Greece on market’s mind; Asian bonds mixed; Ukraine makes progress; Pacific Rubiales in news

By Christine Van Dusen

Atlanta, July 2 – Investors were in wait-and-see mode on Thursday amid little progress on Greece’s economic crisis – ahead of the referendum expected on July 5 – and softer economic data from the United States.

“A lackluster employment report has markets pushing back expectations for Fed rate hikes,” a New York-based trader said.

Spreads tightened on the day, with Brazil an outperformer, he said.

Five-year credit default swaps spreads for Brazil ended Thursday at 254 basis points, from 260 bps, while Mexico’s moved to 128.50 bps from 130 bps.

High-yield credits from Latin American finished the day unchanged or slightly higher, he said.

Most corporate bonds from Asia were firm, following some positive overnight momentum, with investment-grade names moving between 2 bps and 5 bps tighter, a London-based trader said.

“Sovereigns are a mixed bag,” he said. “Philippines’ 2040s are unchanged, with off-the run, mid-curve bonds up 1/8 point to ¼ point.”

He also noted that investors were buying sukuk, which outperformed during the session.

Meanwhile, Ukraine was taking steps toward solving its own economic crisis.

Looking to Latin America, Pacific Rubiales Energy Corp. was in focus again, this time on the news that the votes – for or against a takeover from Mexico’s Alfa SAB de CV and Harbour Energy Ltd. – were in.

This spurred Pacific Rubiales’ bonds to trade lower, a New York-based trader said.

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