2000-05-12 Week ahead

Daily Brady Bond Trading Commentary

Friday May 12 2000 

The week ahead will be a testing one for all markets as we first take in the FOMC actions and then try and interpret them. The current wisdom is that the Fed has little option but to raise rates by 50bps although a small minority continue to see a move of only 25bps.

Markets will remain nervous and it is difficult to see investors committing money until the picture becomes clearer. Dedicated funds are fully invested and other investors are concentrating their money in other areas. We, therefore, expect the way of least resistance to be to the downside although would count out a rally after the Fed decision.

Brazil appears to be the main area of interest and the figures remain solid. In particular we expect the trade figures to show substantial improvement later this year.

The Mexican Presidential election will keep investors cautious in Mexican bond markets and Argentina is still struggling to get its fiscal house in order.

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.