EM prices ‘whipped around’ by Treasury volatility; India closes firm; Turkey bonds weaker

By Christine Van Dusen

Atlanta, Aug. 19 – Asian bonds were softer and Latin American notes widened on Wednesday as a sell-off in risky assets and commodities intensified, equity markets remained volatile and the Federal Reserve appeared close to instituting a rate hike.

“Cash prices get whipped around by Treasury volatility, pre- and post-Fed release and finish lower on the day,” a New York-based trader said.

The tone for Asian credits was “cautious” as the Shanghai composite remained volatile, trading down 5% and then recovering to close the early session up 1%, a London-based trader said.

“Investment-grade cash managed to hold in broadly unchanged while credit default swaps underperformed, moving 3 basis points to 10 bps wider.”

Bonds from Korea moved a couple of basis points wider, he said.

“India closed firm, with Icici Bank Ltd.’s 3 1/8% 2020 trading down at 161 bps,” he said. “Thailand cash was unchanged.”

At the end of the New York session, China corporate bonds were wider or narrower by about 2 bps with very light flow, another trader said.

“The market feels directionless,” he said.

Looking to Turkey, sovereign bonds were weaker after the central bank decided to keep rates unchanged, a trader said.

“We continue to see interest in five-year Turkey banks and corporates at the tights to the sovereign,” he said.

© 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.