Brazil slips as vote on pension bill is postponed; PDVSA outperforms Venezuela in trade

By Rebecca Melvin

New York, Dec. 14 – Emerging market credit was narrowly mixed on Thursday with spreads moving around in the early going in tandem with volatility in the broader markets. But weakness that marked morning trade in Brazil prevailed at the market close.

Brazil opened a little weaker before tightening somewhat and then widening out again as market players focused on news that the vote on a major overhaul of the country’s pension system was postponed until February from a proposed vote next week.

Brazil sovereign notes ended about 2 to 3 basis points wider on the day, with prices down about ¼ point in the long end of the curve and a bit less in the belly, a New York-based trader said.

Venezuela and the Petroleos de Venezuela SA bonds were trading more actively than they had all week, with the PDVSA bonds outperforming the Venezuela bonds, reversing Wednesday’s trend in these credits.

Mexico’s Petroleos Mexicanos SAB de CV (Pemex)’s 6¾% notes due 2047 edged slightly better in active trade, ending the day in the area of 104 5/8 from 104.3 to 104.4 on Wednesday.

Pemex’s 3½% notes due 2020 traded Tuesday at 102 from 101½. And the Pemex 5½% notes gained ½ point to trade at 107½ from 107 on Monday.

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