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.
Elsewhere, bonds issued by oil and gas name Pacific Rubiales were off recent highs following news that a group of investors headed by the O‘Hara Administration had accumulated an approximately 19.02% position in the company.
The move is seen complicating plans by Mexican conglomerate Alfa and Harbour Energy to purchase Pacific Rubiales for C$6 per share in a deal valued at around US$5bn, including debt. O‘Hara’s stake is now slightly larger than the approximately 18.95% stake held by Alfa.
“This means that O‘Hara is a bigger owner than Alfa, and I don’t believe Alfa wants a partner,” said Spielkamp.
Pacific Rubiales’s 2025s were off the recent 87.00 high, but still well supported at around 85.50-86.50 despite the news. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)