Morning Commentary: EM secondary trading lackluster; Hyundai prices $900 million in two tranches

By Rebecca Melvin

New York, Aug. 22 – Trading in emerging markets early Tuesday was lackluster, leaving spreads narrowly mixed to slightly better as Treasuries slipped back after several days of strength.

U.S. Treasury 10-year notes were last down 8/32 to yield 2.21%, which was up from 2.18% on Monday. Yields fell to 2.16% on Friday, which was the lowest level since June 27.

Meanwhile investors were looking ahead to the start on Wednesday of the annual Jackson Hole, Wyo., gathering of central bankers and others. Investors will be watching remarks delivered by ECB president Mario Draghi, but whether he will deliver any new policy message at the Kansas City Federal Reserve’s annual conference was in question.

New issuance remained quiet as the seasonally depressed summer period continues. But in Asia, Hyundai Capital Services Inc. priced $900 million of investment-grade senior notes in five- and 10-year tranches. They priced to yield 135 basis points over U.S. Treasuries and 155 bps over U.S. Treasuries, respectively. That was tighter than talk for spreads of Treasuries plus 155 bps and 170 bps.

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