Morning Commentary: Emerging markets better bid as fears cool; selling hits Venezuela, PDVSA

By Rebecca Melvin

New York, Aug. 15 – Emerging markets were slightly better bid on Tuesday with quiet flow as concerns about the U.S.-North Korea conflict cooled and investors turned their focus to upcoming events like Jackson Hole and European Central Bank policy, as the summer holiday season continued to sap activity, market sources said.

There were no new issues in the Central & Eastern Europe, Middle East and Africa, a market source said.

There was a better bid in Russia sovereign debt, while the Middle East was softer, but quiet.

Investors are being “very pragmatic,” but watchful of the whole world situation and what president Donald Trump will say or do in reaction to geopolitical problems, a market source focused on CEEMEA said.

Meanwhile a sell-off was underway after a quiet Monday in the sovereign credit of Venezuela and its state-owned oil company Petroleos de Venezuela SA, a market source said.

Most of the selling was affecting the sovereign issues, with mostly PDVSA quiet, although a bid was hit at 90.5 in the near-dated PSVSA bond maturing later this year, and the last market seen was 90.5 bid, 91.5 offered.

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