2000-01-24 Money seeking safe haven

Daily Brady Bond Trading Commentary

Monday January 24, 2000 

A weak stock market meant that money sought the relatively safe haven of US Treasuries although Emerging Market bonds traded cautiously and volume was light.

On the economic front, Mexico's trade deficit for December of US$ 895 million was well above the US$ 685 million predicted by economists and should weigh on the Mexican Peso.

On the political front, Ecuador appeared quiet after the events of Friday when General Mendoza nominated a Junta to take over from ousted President Mahuad and then gave in to international pressure and permitted the Vice President, Gustavo Naboa, to take over the office of President.

Prices in nominal terms remained unchanged although PDI bonds were weaker. The Sucre/USDollar exchange rate remained stable at 25,000 Sucres. It will be difficult for Emerging Market bonds to rally in front of the FOMC Meeting and some good news from within the continent.

Bringing an Argentine bond this week will be a challenge and the AFJPs will be critical to its feasibility.

Contributed by

Credit Lyonnais Securities (USA) Inc.


This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.