Notes from Buenos Aires; Ukraine, Russia conflict at critical juncture; Asian names narrow

By Christine Van Dusen

Atlanta, Feb. 11 – The City of Buenos Aires printed new notes on Wednesday as trading activity for Latin American bonds decreased and negotiations for a Ukraine peace deal entered their final day.

“Today should see the leaders of the four countries – Russia, Ukraine, France, Germany – meet face to face,” a London-based analyst said. “It appears that the talks will be mainly focused on creating a demilitarized zone, rather than signing any formal document.”

“At the same time, Russia started unplanned military exercises in the Crimea and there were reports of further violence in Ukraine – perhaps not the ideal backdrop to peace talks,” he said.

But, in better news, Russian assets rallied on Tuesday night on news that Presidents Obama and Putin spoke about pursuing peace. On Wednesday morning, credit default swaps spreads tightened 3 basis points.

Spreads for Central and emerging Europe were mostly unchanged on Wednesday morning after widening as much as 10 bps on Tuesday, he said.

From Asia, high-grade bonds closed Wednesday’s session about 2 bps to 5 bps tighter, with some high-grade property companies in the mix, a London-based trader said.

“Korea spreads closed unchanged or a couple bps tighter,” he said.

High-yield property companies from China closed the Asian session unchanged to ¼ point higher, he said.

From the Middle East, most names opened unchanged on Wednesday and perpetuals received some support, a trader said.

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