Sentiment improves on payrolls data; issuance could pick up; Lat-Am spreads tighten

By Christine Van Dusen

Atlanta, March 4 – Emerging markets assets were stronger on Friday as the United States released data showing that employers in February added more jobs than expected, though wages did dip from the previous month.

“With [non-farm payrolls] out of the way, we move towards the weekend with the market continuing a bullish tone,” a trader said. “With that in mind, next week could be quite supply-heavy after a volatile January and February kept some issuers sidelined.”

Latin American assets finished the week on solid footing, with spreads continuing to tighten, a New York-based trader said.

Brazil’s five-year credit default swaps spreads closed Friday at 406 basis points from 422 bps, while Mexico’s moved to 173 bps from 177 bps.

“Cash prices do slump on United States weakness and short-term buying exhaustion, as well as opportunistic selling,” he said. “Lat-Am high yield finishes mixed on the session.”

Venezuela’s 2027s ended at 40.50 from 41, PDVSA’s 207s dipped to 53.50 from 54, and Argentina’s Bonar 2024s finished the session at 108.20 from 107.

“Flows lightened up significantly today, with not a whole lot of conviction seen either way,” he said. “Markets are now eagerly awaiting European Central Bank action next week and what it means for various asset classes.”

Meanwhile, Asian bonds opened strongly on Friday morning, another trader said, and Turkey’s sovereign and corporate bonds remained “fairly attractive.”

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