HNA prices deal; Greece reaches agreement; more tension in Ukraine; China devalues currency

By Christine Van Dusen

Atlanta, Aug. 11 – China’s HNA Capital Holding Co. Ltd. sold notes on Tuesday as some emerging markets assets bounced off recent lows – on the news that Greece had agreed to a bailout deal with its creditors – while others suffered after China made a surprising devaluation of its currency.

Bonds from Turkey saw short-covering, leading to slightly tighter spreads and prices that outperformed the rates move, a London trader said.

Asian credits, however, failed to maintain a positive tone, another trader said. The currency devaluation “sent ripples” and caused many names to tumble, another trader said.

Investment-grade cash bonds moved 1 basis point to 3 bps wider after the London open, he said.

In other trading from Asia, Malaysia closed 2 bps to 5 bps wider on Tuesday, a trader said.

By the end of the New York session, most other Asian names – particularly in the Chinese corporate arena – had widened between 2 bps and 4 bps, another trader said.

“Very light flow today,” he said. “Weakness was especially apparent in the Korea corporates. We had sellers from banks to motors, from the belly to the 10-year front.”

From Ukraine, sovereign bonds have been fairly active so far this week, and corporates have seen some two-way flow but not much trading, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

Looking to Latin America, low-beta spreads ended the day wider on weaker investor sentiment, a New York-based trader said.

© 2015 Prospect News.
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