EM debt little moved; Rusal eyed after U.S. sanctions relief; Mexico Airport flat to lower

By Rebecca Melvin

New York, Dec. 20 – Emerging markets debt toggled the flat line in light pre-holiday trading on Thursday in a defensive broader market, which saw U.S. equities sell off hard.

The Nasdaq Composite index was down 20% from its peak during the day, it but closed slightly off that level, down 108.42 points, or 1.6%, to 6,528.41 on the day. The Dow Jones industrial average pared early losses but still dropped 464.06 points, or 2% to 22,859.60.

Bonds also sold into the market close, sending the yield on the benchmark 10-year Treasury back up to 2.787%, from 2.782% on Wednesday.

Federal Reserve Chair Jerome Powell’s statements on Wednesday following a two-day Federal Open Market Committee meeting seemed to add to a wall of worry focused mostly around global economic slowing and U.S.-China trade tensions. Specifically, Powell said that the Fed is penciling in two rate hikes in 2019.

The FOMC raised its federal-funds rate to 2.25% to 2.5%, and new projections showed more officials expect the Fed will need to raise rates no more than two times next year.

Meanwhile, the 4.85% 2023 notes of Russia’s United Co. Rusal plc, an issue of $500 million deemed the year’s worst deal by one Central and Eastern Europe region market observer, deserved another look on Thursday after the U.S. Treasury announced sanctions relief for Rusal on Wednesday.

© 2015 Prospect News.
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