Morning Commentary: Emerging markets move tighter after Fed decision; Shougang prices; Iraq eyed

By Rebecca Melvin

New York, July 27 – Emerging market credits were a little tighter across the board early Thursday, with improved tone now that the U.S. Federal Reserve’s policy setting meeting is in the rearview mirror, a market source said.

Wednesday’s FOMC decision – in which rates were left unchanged and balance sheet reductions were indicated to begin relatively soon – were not surprises for the market, leaving stocks and bonds relatively higher. On Thursday, the 10-year Treasury pulled back slightly, reversing some of the widening that took place earlier in the week, the market source noted.

In the primary market, China steelmaker Shougang Co. Ltd. priced €400 million of 1.35% three-year senior notes (expected ratings: //A-) at 99.875 to yield mid-swaps plus 142.5 basis points, according to a syndicate source.

The book at the reoffer price for the Regulation S deal was about €1.4 billion.

Also in the market is a planned $500 million five-year benchmark for the Republic of Iraq, which starts a roadshow on Friday.

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