Deals from Poland, Ghana, Turkcell; mixed session for EM; Asia stays strong, Brazil suffers

By Christine Van Dusen

Atlanta, Oct. 7 – Poland, Ghana and Turkcell Iletisim Hizmetleri AS sold notes on a mixed Wednesday for emerging markets assets, with Asian bonds putting in a strong session while Latin American bonds, led by Brazil, moved wider.

"The last days have been strong markets, with EM risk rebounding," a trader said. "We still think that risks remain to the downside going forward, however."

Flows for Asian bonds were "healthy, with mostly buyers throughout the day," another trader said. "But there was some profit-taking into the close, taking us off the tights. Sovereigns remain wild."

Bonds from the belly of the Indonesia curve were up as much as 1¾ points at the highs but sold off late in the day as a result of profit taking and a release showing a fall in foreign reserves, he said.

"The long end was up 2 points to 2½ points, closing up 1¼ points, with the 2042s and 2043s outperforming," he said.

Brazil was once again in the news, this time after the National Congress again postponed its vote on whether to overrule the president's vetoes of two spending bills.

"Massive reversal in Brazil," a trader said.

At the close on Wednesday, low-beta spreads from Latin America widened, with Brazil leading the way wider and lower, another trader said.

Brazil's five-year credit default swap spreads fell to 445 bps from 410 bps.

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