Weaker U.S. data gives EM bonds a boost; Turkey in focus; Egypt outperforms; Ghana deal ahead

By Christine Van Dusen

Atlanta, July 29 – Emerging markets assets received a strong push into the weekend with the release of weaker-than-expected economic data from the United States for the second quarter.

Also impacting the picture at the end of the week: Crude oil prices have dropped almost 8%.

But, so far, that has not “caused wider spread concerns,” a London-based analyst said.

Turkey remained on the market’s mind, as the country continued recovering from a recent coup attempt.

“Investors are now waiting for Friday’s rating review by Moody’s where the sovereign’s Baa3 rating is currently under review for downgrade,” he said. “We consider the date as too early for Moody’s to conclude its review, but it remains relevant in providing further guidance.”

Meanwhile, bonds from Egypt outperformed as the sovereign made progress in discussions with the International Monetary Fund about a three-year funding program that could total as much as $12 billion.

In response, Egypt’s bonds were solid on Friday, with the 2025s about 35 basis points tighter, week over week, the analyst said. African Export Import Bank, which has “substantial exposure to Egypt,” saw demand for its bonds.

In deal-related news, Ghana will set out on Monday for a roadshow to market a benchmark-sized issue of dollar-denominated notes that will be issued concurrent with a tender offer, a market source said.

Indonesia’s PT Pertamina is looking to issue $1.5 billion of global bonds, a market source said.

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