Asian bonds can’t hold early gains; Turkey bucks trend; Middle East notes move wider

By Christine Van Dusen

Atlanta, Aug. 26 – Asian assets on Wednesday morning got an early boost from a rate cut from the People’s Bank of China, but the tightening did not last, and most names “lost some of the momentum into the close,” a London-based trader said.

“The macro picture remains dark,” he said during the session.

But some other emerging markets assets did manage to trade fairly well on Wednesday, despite the holiday in the United Kingdom. Turkey was a standout, with the torrent of selling seeming to slow.

As the morning went on, sovereign bonds from Turkey got a lift, with the belly of the curve outperforming, another trader said. The 2026 notes tightened by 4 basis points and the 2045s by 2 bps.

Taking a closer look at Asia, bonds from Indonesia and Philippines moved lower during their afternoon session, another trader said.

Bank of China’s 2025s were initially lifted on Wednesday, after the rate cut, but lost steam, he said.

Buyers were seen for 2016 paper from Korea and India, he said.

Trading of corporate bonds from Latin America was “quite timid” after the previous day’s sell-off, a New York-based trader said.

Brazil-based Petroleo Brasileiro SA and Vale SA moved about 5 bps wider amid mixed flows for the former and little activity for the latter.

© 2015 Prospect News.
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