LatAm markets quiet as Easter weekend lull continues; Treasuries send EM gains higher

By Colin Hanner

Chicago, April 17 – The Easter holiday carried over into many world markets on Monday, setting up for a quieter session than usual, a market source said.

In the lower half of the globe, Latin American markets did not have a lot of action, brought on by the inactivity of last week.

“I don’t think that there’s anything out that that hasn’t been announced already,” the source said of new deals coming to market. “[Easter] is a serious holiday in [Latin America].”

Just two sessions following the payment of interest and principal of $2.2 billion to investors, Petroleos de Venezuela SA’s bonds have ticked higher across the board, a market source said, and were trading higher on Monday afternoon.

PDVSA’s 8½% notes due 2017 were up ¾ point from mid-morning to 90¼ bid, 91¼ offered.

The 9% notes due 2021 were up ¼ from the morning session with a 54½ bid, 55½ offer.

And the 6% notes due 2024 were quoted at 39¼ bid, 40¼ offered, unchanged from the morning.

Venezuela’s notes gained some momentum come the afternoon session.

The 7% notes due 2018 were up 1 point at 71 bid, 72 offered.

Its 6% notes due 2020 were quoted at 52¼ bid, 53¼ offered, up ¼ point.

And the 8¼% notes due 2024 were also up ¼ point with a 46¼ bid, 47¼ offer.

Turkey’s vote reverberates

Turkey grappled with the weight of a key referendum vote that took place on Sunday.

With a recount effort already making way, a constitutional referendum was passed on Sunday that will give broader authority to Turkish president Recep Tayyip Erdogan.

Those in favor of the referendum made up over 51% of the votes, while the remainder voted against the measures, citing an abuse of power that would cease the parliamentary system currently in place.

Last week, a market source said sovereign cash trading was 10 basis points wider on the week, mirroring other similar emerging market countries. On Monday, the lira and bonds were up on the vote, which is, at the very least, providing short-term stability in the country.

U.S. Treasuries gain

A market source said that gains from emerging markets last week were due to gains in U.S. Treasuries which pushed the yield curve lower, a trend which slowed on Monday afternoon.

The five-year yield was at 1.78%, unchanged from Thursday and 11 bps lower than last Monday.

The 10-year yield was at 2.23% on Monday, 1 bp higher from Thursday and 10 bps lower than last Monday.

And the 30-year yield was at 2.91%, unchanged from Thursday and 6 bps lower than last Monday.

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