Emirates Islamic Bank issues notes; Lat-Am spreads widen; Turkey trading weaker; Kuwait eyed

By Christine Van Dusen

Atlanta, Aug. 30 – Emirates Islamic Bank sold notes on a Tuesday that saw weakness in oil and equities, which hurt sentiment for emerging markets assets.

Brazil’s five-year credit default swaps spreads closed at 259 basis points from 257 bps as the impeachment trial continued for President Dilma Rousseff. And Mexico’s credit default swaps spreads moved to 138 bps from 136 bps, a New York-based trader said.

“Cash prices are a bit on the soft side, on continued light volumes as Treasury weakness and spread widening have markets adjusting levels a bit lower,” he said. “Lat-Am high yield finishes mostly unchanged on the day.”

Turkey remained on radar screens, as the sovereign continued military operations in Northern Syria.

“Turkey is trading weaker from Friday’s close as the Street leans on the curve and slowly drops offers, but 10-year cash has not pushed through 300 z-spread yet, where I would expect some support,” a trader said. “The curve continues to steepen as the U.S. Treasury curve flattens.”

Credit default swaps spreads for Turkey continued to “tick down slowly,” the analyst said.

Banks and corporates, meanwhile, “feel resilient,” he said, noting some better buying.

“Corporates are still solid, with not much paper around,” he said.

In deal-related news, Kuwait is planning a roadshow for November to market a dollar-denominated issue of Islamic bonds, a market source said.

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