Morning Commentary: EM mostly quiet ahead of central bank meetings; Oman eyed after Fitch downgrade

By Rebecca Melvin

New York, Dec. 12 – Emerging market credit was quiet early Tuesday with focus on three important monetary policy meetings slated this week and as many trading and syndicate desks begin to close out their books for the year ahead of the holiday season.

“With the holiday season quickly approaching, we have seen market activity becoming more muted despite a busy week in terms of news flow and events,” MUFG Securities EM strategist Trieu Pham wrote in a published commentary.

Oman was an exception to the seasonal lull after Fitch Ratings downgraded the Middle Eastern credit to BBB- from BBB, citing a worsening budget but spending expected to remain high even as the price of oil has recovered recently.

The price for West Texas intermediate crude was last down 27 cents, or 0.5% at $57.72 per barrel on the New York Mercantile Exchange but was still higher compared to its Friday close.

The Organization of the Petroleum Exporting Countries and a Russia-led group of big oil producers agreed Nov. 30 to keep limits on their output through the end of 2018, a move that has helped support prices.

The 24 countries that control about 60% of global crude production pledged to withhold about 1.8 million barrels a day of output, which is almost 2% of the world’s output.

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