EM quiet, weaker heading into holiday weekend; Venezuela little changed; Argentina slips

By Rebecca Melvin

New York, Oct. 6 – Trading slowed in emerging markets on Friday and was a touch weaker amid some profit taking heading into the long holiday weekend in the United States and after U.S. Treasury yields pushed up following a weaker-than-expected read on the U.S. labor market for September.

In Latin America, Venezuela bonds traded with investors eyeing the 2017 Venezuela sovereign notes that mature next month.

The Venezuela 2027 was 93¼ bid on Friday, which was slightly lower. But most investors expect the bond will be repaid at maturity despite the cash crunch of President Nicolas Maduro’s troubled regime.

“We think [the bonds] are going to be paid and they should continue to move to par. After October, the bonds should be trading at 95,” a New York-based trader said.

Meanwhile, Argentina sovereign debt was weaker on the heels of a significant run up on the week and amid profit taking heading into the holiday weekend.

While the whole curve was somewhat weaker, the Argentina 2117 notes were notably so as were the Argentina 2026 and 2027 notes, or the belly of the curve, a trader said.

The primary market was quiet on Friday after a busy week that has seen a lot of paper pricing in the Middle East region.

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