2000-04-06 Debt looks oversold
Daily Brady Bond Trading Commentary
Thursday April 6, 2000
After the last few days, Emerging Market debt had begun to look oversold and price action today built on yesterday's firmer tone.
Equity markets also followed the upward bias as investors bought. Brazilian industrial production figures were higher than predicted and gave credence to the view that economic activity is picking up despite the occasional weak monthly figure.
Rumors were that Argentina is in the market to do a bond exchange and retiring more Brady bonds and, perhaps, some BOCONS. Overall we see the markets still dealer driven and, given that traders had to take some paper in the sell-off, we believe that the upside will be capped as dealers take profits as prices rise.
The correlation with the US equity markets seems to be firmly in place and we will continue to see volatility so long as this continues .
Contributed by
Credit Lyonnais Securities (USA) Inc.
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