Deal from Wuxi issuer; EM sees support after polls oppose Brexit; Lat-Am strong, then fades

By Christine Van Dusen

Atlanta, June 20 – China’s Wuxi Construction and Development Investment Co. Ltd. advanced a deal on a low-volume but mostly positive Monday for emerging markets assets as polls indicated support for the United Kingdom to remain in the European Union.

A vote is scheduled for Thursday.

“EM credit opens strong,” a trader said. “Cash prices are getting bid up relentlessly on low volume as United States Treasury weakness is being more than offset by spread tightening. Volumes are very low, which begs the question if this move has much depth to it.”

From Latin America, bonds started off strong and then faded a bit into the close, a New York-based trader said.

Brazil’s five-year credit default swaps spreads closed at 331 basis points from 340 bps, while Mexico’s moved to 168 bps from 177 bps, he said.

“Low-beta cash prices close mostly unchanged, as the Treasury sell-off offsets spread tightening,” he said. “Lat-Am high yield finishes firmer on the day, with both Venezuela and Argentina higher.”

“Flows extremely light today, with not a whole lot of conviction either way,” he said. “Seems it may be quiet leading into the referendum, as position-squaring drives day-to-day moves.”

Looking to the Middle East, bonds put in “one of the strongest mornings for quite some time in this space,” a trader said. “Textbook tightening across the board, led, of course, by Qatar.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.