EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (21 Feb)
Source: BBG
Measure Level Δ DoD
5yr UST 4.3% -8bp
10yr UST 4.4% -8bp
5s-10s UST 15.8 +0bp
WTI Crude 70.3 -2.2
Gold 2935 -4.3
Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 859bp +2bp
BRAZIL 6 1/8 03/15/34 259bp +6bp
BRAZIL 7 1/8 05/13/54 343bp +4bp
COLOM 8 11/14/35 370bp +6bp
COLOM 8 3/8 11/07/54 453bp +7bp
ELSALV 7.65 06/15/35 400bp +2bp
MEX 6 7/8 05/13/37 263bp +5bp
MEX 7 3/8 05/13/55 322bp +6bp
CHILE 5.65 01/13/37 151bp +4bp
PANAMA 6.4 02/14/35 318bp +6bp
CSNABZ 5 7/8 04/08/32 541bp +3bp
MRFGBZ 3.95 01/29/31 294bp +7bp
PEMEX 7.69 01/23/50 631bp +5bp
CDEL 6.33 01/13/35 195bp +4bp
SUZANO 3 1/8 01/15/32 185bp +6bp
FX Level Δ DoD
USDBRL 5.73 +0.03
USDCLP 946.68 +3.53
USDMXN 20.4 +0.11
USDCOP 4081.00 +4.65
USDPEN 3.68 -0.00
CDS Level Δ DoD
Mexico 121 2
Brazil 168 3
Colombia 193 7
Chile 56 2
CDX EM 97.65 (0.16)
CDX EM IG 101.20 (0.06)
CDX EM HY 93.91 (0.17)
Main stories recap:
EM Asia opened calm with small spread widening while CEEMEA followed through similarly with the primary market quiet and people left to focus on idiosyncratic news, at least until US economic data was released which left a whiff of stagflation in the air with a trifecta of bad news. The service sector PMI, existing home sales and the University of Michigan sentiment/expectations indicators fell more than expected while 5-10 year inflation expectations rose to 3.5%. That led to a decline in US equities of about 2%, a rally in US Treasury yields of 8 bps and an overall risk-off mood. Latam benchmark sovereign and corporate bond spreads generally widened 5-7 bps across the board. Bonds of higher quality issuers like Chile as well as high grade corporate bonds quoted on spread like America Movil (AMXLMM) and Bimbo (BIMBOA) kept up better with Treasuries and outperformed.
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