Brazil bonds, currency weaker, but EM debt firmer overall; EM primary in deep slumber

By Rebecca Melvin

New York, Aug. 21 – Brazil’s sovereign and corporate bonds edged lower for a second day and the Brazilian real dropped on Tuesday amid jitters over the country’s upcoming presidential election. The debt of Latin America’s other major sovereigns was firmer however, as was emerging markets debt in general during a risk-on day in the financial markets.

Brazil’s 4 5/8% notes due 2028 slipped just 0.1% to 92.392. Brazil’s 6% notes due 2026 were down 0.15% at 104.097 from 104.247 on Monday.

Fibria Celulose SA’s 4% green bonds due 2025 ended just slightly lower at 93.90 bid, 94˝ offered, down five cents from 94.05 on Monday.

The Brazilian real weakened to 4.05 real to the U.S. dollar. The level was 3.97 real to the dollar on Monday.

Venezuela’s sovereign and Petroleos de Venezuela SA bonds remained little changed as the new economic plans of president Nicolas Maduro went into effect.

The PDVSA 8˝% bonds due 2020 were called “stuck” in the context of 87 bid, 88 offered, while Venezuela’s 2034 notes were trading a tiny bit better on buyers at 27˝ bid, 28˝ offered.

Meanwhile, a lull that is typical during the summer months has been more pronounced this year due to troubles that hit the Turkish lira, Argentine peso and other emerging-markets currencies last spring in the face of the strengthening dollar.

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