Morning Commentary: EM debt weaker; Saudi Arabia an under-performer as OPEC meets

By Rebecca Melvin

New York, Dec. 6 – Emerging markets debt was weaker on Thursday as global stocks continued to slide lower, U.S. Treasury yields fell and oil priced dropped.

“Pretty weak day across the board!” a London-based market source said, citing spreads between 5 basis points and 15 bps wider for most credits in the Central and Eastern Europe, Middle East and Africa region.

Saudi Arabia was a notable under-performer, the market source said, as investors focus on whether the meeting of OPEC members plus Russia on Thursday will be able to find a way to support the price of oil, which has dropped sharply since October.

The price of oil fell 22% in November and was down again on Thursday amid speculation that OPEC’s actions will not be strong enough.

Spreads for Saudi Arabia bonds were wider across the curve by approximately 12 bps and 15 bps. The Saudi 4˝% notes due 2046 were seen wider by 18.5 bps.

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