2000-05-09 Debt prices mostly unchanged
Daily Brady Bond Trading Commentary
Tuesday May 9 2000
Emerging markets debt prices remained mostly unchanged Tuesday as liquidity continued to dry up ahead of next week's FOMC meeting. After getting hit with paper from accounts last week, dealers are still anxious to sell into strength.
A number of corporate deals from the past six months are also growing stale on dealers' books, and may force further hedge-related selling. With 50 bps of tightening virtually factored in to the U.S. Treasury market, we see room for a relief rally after the fact next week, although any strong comments from the Fed will impact the market as much as the interest rate action.
In any case, supply dictates that equity related bounces are likely to be met with heavy selling pressure in the near term. Mexico's April CPI met expectations at 0.57% m/m, representing annual inflation at 9.75% (the government's 2000 year-end target is 10%).
Contributed by
Credit Lyonnais Securities (USA) Inc.
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