EM debt narrowly mixed in quiet summer session; Turkish lira stabilizes after steep plunge

By Rebecca Melvin

New York, Aug. 7 – Emerging markets debt was narrowly mixed in quiet trade on Tuesday, with early improvements giving way to a neutral to lower tone as the dollar pulled back from its high mark on Monday and as U.S. Treasuries eased. However, there was very little by way of trading action among emerging markets credits and little to provide a reliable read on the space, a New York-based market source said.

“Any conclusions would be misleading at best,” the source said, adding that the broader market moves provided an indicator of any activity.

There was no further weakening of Argentina corporate bonds after widening spreads and lower prices were seen on Monday in reaction to headlines of bribery and corruption, the market source said, referring to Argentina Jato, or the car wash investigation.

Albanesi SA’s 9 5/8% notes due 2023 notes, which have been volatile for more than a week, were trading back up around 96 this week after the bonds dropped from par to as low as 79 last week in reaction to the arrest of the company’s chairman in the corruption investigation.

Elsewhere, the Turkish lira remained weak but rebounded slightly after falling to record lows on Monday. The yield on Turkey’s 10-year dollar bond yield surged to 42 basis points over Treasuries, before coming back to 18 bps over.

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