Morning Commentary: EM bond spreads slightly better amid light pre-holiday trading

By Rebecca Melvin

New York, Dec. 21 – Emerging markets debt spreads improved slightly on Friday as liquidity dried up ahead of the Christmas holiday next week.

The J.P. Morgan emerging market bond global index was at a spread of 423 basis points, which was in by 2 bps.

For the year as of the close on Thursday, the total return for the JPM EMBI global is negative 4.51%.

Liquidity is gone out of the market, a New York-based market source said, describing the trading desk of his firm as only half staffed.

The new issue market for EM bonds is effectively closed except for some Chinese issuance.

“There is very little in the way of large, strategic positions during the rest of the year,” the market source said.

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