Montenegro roadshow ahead; payrolls data puts pressure on EM; Asia stays firm, Lat-Am suffers

By Christine Van Dusen

Atlanta, March 6 – Montenegro set a roadshow on Friday as the release of positive payrolls data from the United States pushed Treasury rates higher and put pressure on some emerging markets assets.

“The rise in U.S. rates only seemed to bring more sellers into a challenged liquidity backdrop and a risk-averse market in most assets, globally,” a New York-based trader said. “We saw less activity today as the market seemed a little shocked at where things traded and needed time to regroup and figure out what to do at the start of next week.”

The payroll numbers – which showed that hiring increased in February and that the jobless rate declined – hit Latin American assets fairly hard, he said.

Many investors stayed on the sidelines and watched low-beta cash bonds fall 1 point to 2˝ points on Friday. Argentina, however, managed to stand outside the fray, as did Venezuela.

“The market is still comfortable with Venezuela,” he said. “They hope they’ll figure out additional ways to generate revenues and push the thought of default further back.”

Prior to the data release, Asian bonds remained firm, with high-grade cash bonds mostly unchanged during the morning and a little bit of selling seen from real-money accounts ahead of payroll numbers from the United States.

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