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.

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.