Slow Start For LatAm Despite Oil Price Jump
NEW YORK, March 26 (IFR) - Latin American credits were off to a lackluster start Thursday despite an uptick in crude prices, with names largely drifting lower amid a softer tone in the broader market.
Global stocks were weaker but oil surged after Saudi Arabia launched airstrikes in Yemen, pushing Brent up US$3 to around US$60 a barrel and providing some support to the oil-rich region.
"The fact that oil prices are up helps (Latin America)," said a syndicate manager. "That US rates are within 2% on the 10-year is also driving people into better-yielding credits."
But with investors uncertain about the direction of US Treasury yields ahead of the release of fourth-quarter GDP figures Friday, the general mood was cautious.
"It looks like the market is trying to go lower, but there aren't a lot of aggressive offers," said Rodrigo Covian, head of fixed-income at Bulltick.
After an active day Wednesday, Brazilian credits were taking a breather but remained well supported after a decent rally this week.
But Brazil's Petrobras's curve was some 10bp wider early in the session, with the 2024s and 2044s being quoted at 540bp-535bp and 545bp-535bp, respectively.
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