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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Monday, February 7 2000

Daily Brady Bond Trading Commentary

Both bond and equity markets in Latin America put in a solid performance as buyers searched for value and yield. Brazil continues to trade well and traders are heartened by the fact that inflation seems to be under control and a belief that the trade deficit will not get any worse and, in fact, should show improvement in the next few months. In Brazil, EI bonds have lagged in the last two weeks and demand for them picked up. We expect this demand to continue as investors and traders search for value. Mexico also built on its strength from last week and, given the spectacular growth figures from the USA, Mexico looks well set to benefit from this. The oil price is also helping Mexico and should translate into better foreign exchange reserves in Mexico, Venezuela and Ecuador, which, in turn, will further aid sentiment. The US bond markets traded a little more normally after the fireworks of last week and the curve, although still inverted, is not so pronounced with the 30 year yielding 6.34 per cent.
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.
 

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