Sharjah prices on difficult day; Mexico trades strongly; Treasury rally gives late boost to EM

By Christine Van Dusen

Atlanta, Jan. 20 – The Emirate of Sharjah sold notes on a challenging Wednesday for emerging markets assets, which saw the previous day’s bounce erode before recovering slightly with a rally in U.S. Treasuries.

Oil prices were, again, largely to blame for the difficult session.

“Liquidity is tightening and the stock market is melting down,” according to a report from Commerzbank.

Investors showed some interest in bonds from Turkish banks and corporates, a trader said, as well as some Middle Eastern banks.

Meanwhile, bonds from Mexico managed to trade “super-well, given how the rest of the market and United States credit are opening,” a New York-based trader said. “Wider, yes, but barely changed in price.”

Flows were mixed, he said.

“But I do not know where the bids are coming from,” he said. “Mexico seems to be defying gravity here.”

Petroleos Mexicanos SAB de CV’s bonds traded lower and saw only sellers on Wednesday, he said.

Notes from Peru moved “lower and wider,” another trader said. “But cash prices are getting a bit of a cushion from the U.S. Treasury rally.”

Late in the day, sovereign credit from Latin America was wider, but off the wides and lows of the session, another trader said.

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