Colombia sells notes; Fed news boosts EM bonds; Lat-Am prices rise; South Africa, Turkey eyed

By Christine Van Dusen

Atlanta, March 16 – Colombia sold notes on Wednesday, while all eyes were on the Federal Open Market Committee, which lowered its expectations for economic growth this year – news that was good for emerging markets assets.

For bonds from Latin America, it was a “rip fest,” a New York-based trader said, “with spreads aggressively tightening and cash prices surging.”

“Cash prices were soft to start the session but went ballistic post-Fed, with almost any onscreen offer lifted,” he said. “Latin American high-yield also finishes higher on the day.”

In other news, South Africa received attention on Wednesday as the finance minister remained under pressure from police after failing to cooperate with an investigation into surveillance by the revenue service.

“We expect the matters and investor doubts to be far from over,” a strategist said.

From Turkey, the prime minister was expected to use “softer rhetoric” to push for more presidential powers, the strategist said.

“Investors are likely to remain skeptical, as a presidential system could further erode governance amid a renewed armed conflict versus Kurdish militants, alleged attacks on press freedom and doubts about central bank independence,” he said.

In deal-related news, Colombia is looking to issue euro-denominated notes, according to a filing from the sovereign.

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