Morning Commentary: Some sellers emerge amid mixed tone in EM debt market; primary quiet

By Rebecca Melvin

New York, March 4 – There were some sellers of emerging markets debt in the early going on Monday, leaving the market with a lightly mixed tone, according to a market source.

Investors continue to watch prospects for a U.S.-China trade deal, and absences in the EM primary calendar continue to be mostly supportive of secondary market spreads.

No new mandates in the Central & Eastern Europe, Middle East and Africa region were heard as of late morning. The calendar contains a couple of deals for Turkish corporates and a deal on the road for Russia fertilizer company EuroChem Group AG. Prospects for further issuance from Russia remains a question mark.

Meanwhile, negative rating agency news hit Mexico’s bonds. On Friday, S&P Global Ratings said it revised its outlook on Mexico to negative from stable and affirmed the BBB+/A-2 foreign currency sovereign credit ratings.

S&P said its action was based on its view of potentially higher contingent liabilities and lower GDP growth prospects that could weaken the sovereign’s financial profile.

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