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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Tuesday, February 8 2000

Daily Brady Bond Trading Commentary

Emerging markets debt rallied again Tuesday morning, following two days of significant spread tightening. Buying interest waned by mid-morning, however, and longs are once again left to wait to be taken out by a new wave of demand. The problem so far this year is that the level of institutional demand the market has been awaiting is yet to materialize. The strong growth figures in Brazil, combined with lower than expected inflation, have helped to boost prices this week. Reports that Russia and London club creditors are near finalizing a restructuring deal has also helped sentiment. But fixed income markets continue to lag equities, and it may be a while before that trend is reversed. Anticipation of two more Fed rate hikes in the first half and another one or two in the second half of 2000 is the major factor behind the cautious tone.
This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.
 

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