Asian bonds calm despite overnight tumult; Lat-Am ‘relatively stable’; Ghana sets roadshow

By Christine Van Dusen

Atlanta, Sept. 2 – Paper from emerging markets on Wednesday held on to the previous day’s tone – decent selling of long-dated paper and “multiple bids hit in the street and credit default swaps lifted” – while bonds from banks saw some demand, a London-based trader said.

“The selling has taken a pause here, but it doesn’t feel like we are going to get much participation by investors in risk to take it tighter yet,” he said. “On closer inspection, the bank curves have flattened out versus sovereigns,” he said.

Bonds from Asia were fairly calm on Wednesday, despite tumultuous market activity overnight, another trader said.

“To be fair, over the morning the sellers of risk grossly outweighed buyers, and spreads in Asia investment grade were 3 basis points to 6 bps wider in broad terms,” he said. “Oil names are unchanged on the front end, but the mid- to longer-curve is under pressure, 5 bps to 6 bps wider.”

Looking to Latin American sovereigns, spreads were consolidating on Wednesday morning, moving wider but remaining “relatively stable,” a New York-based trader said.

“Low-beta cash prices do continue to trade heavy, as markets may be skeptical of this bounce in risk assets,” he said. “Trend has been to sell strength as of late, so we may be witnessing some of that this morning.”

Ghana will set out on a roadshow during the third week of September for a $1.5 billion issue of notes, a market source said.

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