2000-05-25 Debt prices stalled

Daily Brady Bond Trading Commentary

Thursday May 25 2000 

The recovery in Latin debt prices stalled Thursday afternoon as U.S. equity markets turned south again. 

Argentine assets have outperformed for two days on dealer short-covering and a small amount of buying interest from investors.

Venezuela's Supreme Court ruled in favor of postponing national elections, which were scheduled for May 28, on account of technical difficulties (with vote-counting software). The delay may benefit President Chavez's opponents in terms of assembly seats or state and local posts, though Chavez appears to have a strong hold retaining the Presidency.

Hitches, for different reasons, in the Peruvian and Venezuelan elections are not helping an already nervous debt market, although it appears Peru's election will take place this Sunday.

On a positive note, we detect some easing of interest rate fears in recent days, after Fed-watchers had grown increasingly pessimistic since the last FOMC meeting. A dearth of economic releases has something to do with the calm, but we do believe that the Fed has not set a strict course for rates and will be watching data as closely as ever in coming months.

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.