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Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Thursday, February 17 2000

Daily Brady Bond Trading Commentary

Today's comments by Fed Chairman Greenspan may have been intended to convey a more hawkish tone, but when all was said and done it appeared that only short-end Treasury traders were paying attention. As always, Greenspan tempered his caution with acknowledgement of tremendous gains in productivity and the absence of concrete evidence of inflation. But the message seemed clear: if inflation remains tame and all else equal, we can still expect two or three more tightenings; if inflation rears its ugly head, the Fed will take more severe action. As we head into the next "wait and see" phase in the Treasury market, there are reasons. including accelerating growth, rising commodity prices, and a positive ratings trend, to stay invested in EM debt and take advantage of the still large yield pick-up. But a rising interest rate environment should temper capital gains potential on most credits.
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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