LatAm credit prices drift higher in stronger market

Fri May 8, 2015 2:43pm EDT
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By Paul Kilby

NEW YORK, May 8 (IFR) - Latin American bond prices were largely ending higher on Friday, tracking a rally in the broader markets following the release of benign US jobs data earlier in the session.

Jobless claims came in line with expectations but were not high enough to make markets believe that the Fed would soon act to hike short-term interest rates.

April payrolls were slightly below expectations at 223,000, but March numbers were revised downward to 85,000.

"Most analysts think that rate hikes will now come in September, but our research (analysts) think it will be December," Klaus Spielkamp, head of fixed-income sales at Bulltick in Miami.

The perceived reprieve from any imminent tightening in US monetary policy has helped provide support to a Latin American credit market that had already been resilient to this week's sell-off in global rates.

Yields on the 10-year US Treasury were being spotted at around 2.12% in early afternoon trading, down from the 2.25% earlier this week.

Low beta sovereign bonds were ending the day stronger as a result, with Brazil 2025s closing around 99.75-100.00, up from the 98.50 mid-market price seen Thursday.

Such levels put the bond closer to tapping range amid speculation that the Brazilian sovereign may soon reopen the 10-year benchmark to send a message that the country now has access to international funding.   Continued...