EM LATAM CREDIT: MNI EM Credit Market Wrap - LATAM (07 Feb)

Source: BBG

Measure Level Δ DoD
5yr UST 4.3% +6bp
10yr UST 4.5% +5bp
5s-10s UST 15.4 -0bp
WTI Crude 71.0 +0.4
Gold 2861 +5.2

Bonds (CBBT) Z-Sprd Δ DoD
ARGENT 3 1/2 07/09/41 793bp +3bp
BRAZIL 6 1/8 03/15/34 254bp -2bp
BRAZIL 7 1/8 05/13/54 344bp -3bp
COLOM 8 11/14/35 376bp -4bp
COLOM 8 3/8 11/07/54 454bp -4bp
ELSALV 7.65 06/15/35 384bp -11bp

MEX 6 7/8 05/13/37 259bp -3bp
MEX 7 3/8 05/13/55 315bp -5bp
CHILE 5.65 01/13/37 146bp -2bp
PANAMA 6.4 02/14/35 332bp -1bp

CSNABZ 5 7/8 04/08/32 537bp -5bp
MRFGBZ 3.95 01/29/31 290bp -5bp
PEMEX 7.69 01/23/50 641bp -2bp
CDEL 6.33 01/13/35 198bp -2bp
SUZANO 3 1/8 01/15/32 185bp -0bp

FX Level Δ DoD
USDBRL 5.81 +0.04
USDCLP 964.16 +0.88
USDMXN 20.6 +0.13
USDCOP 4121.75 -15.62
USDPEN 3.72 +0.00

CDS Level Δ DoD
Mexico 124 (1)
Brazil 173 (1)
Colombia 195 (4)
Chile 59 (0)
CDX EM 97.55 0.01
CDX EM IG 100.98 0.00
CDX EM HY 93.78 (0.02)

Main stories recap:

Relatively quiet start for EM out of Asia as the world awaited the monthly US labor report. CEEMEA followed through with a bit of spread tightening in the secondary market amid rising US Treasury yields and no primary market activity. US Treasury prices traded lower after the US unemployment rate was reported at 4.0% vs 4.1% expected and less than expected annual revisions to payrolls. US Treasuries continued to slide after an unexpected leap in University of Michigan’s inflation expectations for the next year to 4.3% from 3.3%. Higher rated, more interest rate sensitive, liquid Latam sovereign bonds fell in price but less than Treasuries so spreads tightened and that effect was even more pronounced in less liquid or more idiosyncratic issues so overall the EM market closed the week on a firm note.