EM assets weaken after holiday, before ECB; Yapi Kredi plans notes; Petrobras, Vale suffer

By Christine Van Dusen

Atlanta, Nov. 30 – Emerging markets assets were weaker on Monday, with dealers avoiding risk ahead of the European Central Bank’s rate decision and non-farm payrolls data from the United States, both expected later this week.

“The weakness in emerging markets persists,” a trader said. “Rates remain range-bound as we await this week’s ECB policy action.”

In deal-related news, Istanbul-based lender Yapi ve Kredi Bankasi AS (Yapi Kredi) set off on a roadshow for a dollar-denominated issue of notes that is expected to come to the market in early 2016, a market source said.

“The roadshow sees strong demand, out of the gates,” a trader said. “If the feedback and demand is there I’m sure they will not wait. Limited reaction on the bank curves so far.”

The marketing trip is being held in Asia, Europe and the United States.

Looking to Latin America, trading was slow on Monday, with Brazil-based Petroleo Brasileiro SA moving lower by about a ½ point, a New York-based trader said.

Brazil’s Vale SA also continued to decline on Monday as iron ore hit new lows and the government considered suing the company for its role in the dam burst and flood from the Samarco mine.

On a spread basis, Vale’s bonds moved as much as 40 basis points wider on Monday, he said.

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