Bahrain, Oman spreads wider; tone weaker; LatAm back on its heels amid tariff uncertainty

By Rebecca Melvin

New York, March 2 – Emerging markets were weaker on Friday, with spreads wider across the board in the Middle East and Africa region, as rates wavered then popped higher at the end of the European session.

“A weaker macro picture plus a [dollar] chart that just maybe has double bottomed for the near term are weighing on the market,” a London-based trader said. “March so far is starting and feeling more like February than January at this stage.”

The emerging markets in February weakened compared to a strong January with record high issuance.

In the Middle East, Bahrain’s bond spreads were wider with the Bahrain 2047 notes quoted at about 94¼ at the midpoint and a spread about 10 basis points wider on the week. Fitch downgraded the sovereign’s foreign-currency issuer rating to BB- from BB+ on Thursday, citing lack of a clear strategy in the medium term to tackle high deficits.

Oman was also sharply lower, with spreads wider by 10 to 13 bps, the London-based trader said. Egypt and Africa were also weaker.

Mexico’s bonds fell but stabilized on Friday, with the whole Latin America region seeming to regain its footing but with a weaker tone as debt capital market players accessed the potential impact of President Donald Trump’s controversial plan to impose global tariffs on aluminum and steel.

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