EM debt mostly steady; Mexico outperforms as investors cheer budget

By Rebecca Melvin

New York, Dec. 17 – Emerging markets debt held in overall on Monday, with market players accepting the likelihood of another rate hike by the U.S. Federal Reserve this week, but eyeing signs of dovishness going forward as worries about global growth and the U.S.-China trade dispute continue.

The Federal Open Market Committee’s meeting this week will likely conclude with a 0.25% rate hike on Wednesday, which would mark the policymakers’ fourth increase this year, but less optimistic growth expectations could slow the central bank’s rate-hiking pace in 2019.

In the Middle East and Africa region on Monday, market tone was “OK” but activity was very muted, a London-based trader said.

The MENA region opened up better on Monday after finishing out last week generally “tired” as investors turned mostly sellers to minimize long positions heading into the mid-December weekend.

Meanwhile, Mexico’s sovereign bonds as well as those of Petroleos Mexicanos SAB and Mexico City Airport bonds were better by about 20 cents on the day on average. That increase wasn’t that much in and of itself, but given that the rest of the market was under pressure, Mexico outperformed, a source said.

The new president’s first budget delivered to congress on Saturday was viewed positively, the source said.

© 2015 Prospect News.
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